Amazon Layoffs 14,000 Workers: Reasons and Impacts

Amazon confirmed a plan to lay off a total of 14,000 employees. These cuts were described as part of the company's efforts to reduce costs and streamline operations.

The retail giant, which is based in Seattle, is trying to reverse the hiring spree it undertook during the pandemic. The company’s CEO warned in the summer that white-collar workers faced a threat from artificial intelligence.

Beth Galetti, Amazon's senior vice president, said in a note to employees on Tuesday, “The cuts we shared today are a continuation of our efforts to be stronger. Bureaucracy will be reduced, layers will be eliminated, and we will redirect our resources to invest in the most important areas based on our customers' needs.”

According to reports from Reuters and the Wall Street Journal, Amazon plans to lay off as many as 30,000 corporate workers. These cuts are a reflection of efforts to reverse the large hiring spree conducted during the coronavirus pandemic. CNBC characterized this situation as the largest wave of layoffs in the company’s history.

Those laid off make up just a small portion of Amazon's 1.55 million employees; however, there will be a significant loss among its approximately 350,000 corporate staff.

Galetti also added that specific areas would be identified to achieve further layer reduction and efficiency gains. “Some may ask why we are reducing roles when the company is performing well. However, we must not forget the changing world,” she said.

Amazon shares rose by 1.2% following the layoff news. Meanwhile, other internet giants that made major workforce hires during the pandemic, such as Microsoft, Meta (the parent company of WhatsApp, Instagram, and Facebook), and Alphabet (the parent company of Google and YouTube), have similarly laid off tens of thousands of employees.

In June, Amazon CEO Andy Jassy emphasized the goal of reducing hierarchy by cutting down the number of managers and managing the processes that would reduce employee count using artificial intelligence. Amazon has also implemented workforce reductions in its devices and various other divisions.

This week's cuts will affect a wide range of areas, including human resources, technology, devices, and services. Fortune reports that there could be cuts of up to 15% within human resources roles.

Team managers affected by the layoffs have been reported to receive training on how to communicate with employees.