Amazon lays off 14,000 staff amid major AI investment drive

Seattle: Amazon is cutting around 14,000 corporate jobs as the company increases spending on artificial intelligence projects, drawing criticism from labour advocates who see the move as part of a wider trend of replacing workers with machines.

Chief Executive Andy Jassy, who has led a drive to cut costs since taking charge in 2021, said earlier this year that advances in generative AI would reshape Amazon’s corporate workforce. The company says more than 1,000 AI-related applications are already built or in development, describing that number as only a “small fraction” of future plans.

Earlier this month, Amazon announced a 10 billion dollar investment to build a new cloud and AI campus in North Carolina. Similar investments are being made in data centre projects in Mississippi, Indiana and Ohio as the company expands its infrastructure to compete with other technology giants such as Google, Microsoft and OpenAI.

Jassy said the company’s focus on AI was central to its long-term growth strategy. “If your mission is to make customers’ lives easier every day, and you believe every experience will be reinvented with AI, then you invest heavily in AI, and that’s what we’re doing,” he said in May.

The job cuts, amounting to around four per cent of Amazon’s corporate workforce, were announced in a message to staff on Tuesday. Beth Galetti, Senior Vice President for People Experience and Technology, said the reductions were part of a plan to “reduce bureaucracy and shift resources” towards key priorities.

Affected employees will have 90 days to apply for internal roles, while those unable to find a new position will receive severance pay, outplacement support and health coverage. Amazon employs about 350,000 people in corporate roles and 1.56 million worldwide, including warehouse and delivery workers.

The layoffs are the company’s largest since 2023, when about 27,000 jobs were cut in multiple phases. Analysts say the latest reduction shows that Amazon is still adjusting after the surge in hiring during the pandemic, when online demand soared.

Neil Saunders, Managing Director at GlobalData, said the move represents a “deep cleaning” of Amazon’s corporate structure. “The company is in a strong position, but it needs to control costs to protect its bottom line amid rising global expenses,” he said. “In some ways, this marks a shift from human capital to technological infrastructure.”

Labour representatives have criticised the cuts, arguing that they reflect a wider pattern of profit-driven automation across the tech sector. “The billions being spent on AI projects could have gone towards better wages and job stability,” said one union official in Seattle. “Instead, we’re watching secure work vanish in the name of efficiency.”

Amazon will release its quarterly financial results on Thursday. In its most recent quarter, the company reported a 17.5 per cent increase in revenue from Amazon Web Services, its most profitable division and the primary focus of its AI investment strategy.