Amazon is eliminating 16,000 jobs as part of its restructuring and AI transformation plan
Amazon announced on Wednesday its decision to eliminate an additional 16,000 jobs worldwide as part of a comprehensive restructuring plan, the outlines of which were first revealed last October. This move underscores the company's commitment to reducing operating expenses and reorganizing its internal structure to address global economic challenges.
Details of the restructuring and bureaucracy reduction plan
In an official statement, Amazon's Senior Vice President of Human Resources, Beth Galetti, explained that the primary goal of the new round of layoffs is "to reduce multiple layers of management, foster a sense of individual accountability among employees, and eliminate bureaucratic hurdles that can impede rapid decision-making." The company indicated that these measures are necessary to maintain the organization's agility and ability to innovate in a rapidly changing market.
Media reports in October indicated that the total number of jobs planned for elimination could reach 30,000, representing approximately 10% of the company's corporate workforce of roughly 350,000 employees. It's worth noting that these cuts do not target the distribution and warehousing sector, where employees comprise the vast majority of Amazon's 1.5 million employees worldwide.
The context of the technology sector and the shift towards artificial intelligence
Amazon's move cannot be separated from the general context of the technology sector globally. After the massive hiring spree by major tech companies during the coronavirus pandemic to meet the increased demand for digital services, many of these companies, including Amazon, have begun a "course correction" phase to reduce expenses and cope with the slowdown in global economic growth and inflation rates.
Furthermore, this announcement coincides with a major strategic shift in Amazon's investment priorities. Reports indicate that the company is heavily redirecting its financial and human resources toward artificial intelligence (AI) , a highly competitive field among tech giants. This shift requires new skills and a different structure, which partially explains the elimination of some traditional roles in favor of investing in infrastructure and developing AI models.
Expected financial results
Amazon did not provide specific details on Wednesday regarding which departments would be affected by the latest cuts, stating only that "each team will continue to evaluate its structure to ensure speed of execution and the ability to meet customer needs." Markets and investors are awaiting the company's 2025 financial results, scheduled for February 6th during a conference call, where further details regarding the financial impact of this restructuring and future performance forecasts are expected to be revealed.
