Amazon announces 16,000 job cuts worldwide in fresh layoff round
Amazon will lay off 16,000 employees globally in its second major job cut in three months. Restructuring and increased use of AI tools are reported to be the reason behind the layoffs.
American tech giant Amazon on Wednesday announced that it will cut 16,000 jobs from its global workforce, marking the company’s second major round of layoffs in the past three months. The move comes as Amazon continues to restructure following aggressive hiring during the pandemic and expands the use of artificial intelligence (AI) tools across its operations.
The latest job cuts are expected to impact employees across Amazon Web Services (AWS), retail, Prime Video, and the human resources division. According to a CNBC report, the company had eliminated around 14,000 white-collar jobs at the end of October last year.
Amazon says frequent layoffs are not the plan
Beth Galetti, Senior Vice President of People Experience and Technology at Amazon, sought to reassure employees amid concerns over recurring layoffs.
“Some of you may be asking if this is the beginning of a new era — where we will announce large-scale cuts every few months. That is not our plan,” Galetti said.
She added that most US-based employees affected by the layoffs will be given 90 days to seek internal roles within the company. The timeline may vary internationally depending on local regulations.
Transition support for affected employees
“For teammates who are unable to find a new role at Amazon or who choose not to look for one, we’ll provide transition support including severance pay, outplacement services, health insurance benefits (as applicable), and more,” Galetti said.
She also clarified that despite the layoffs, Amazon will continue to hire and invest in strategic areas critical to its long-term growth.
“While we’re making these changes, we’ll also continue hiring and investing in strategic areas and functions that are critical to our future,” she said.
AI adoption driving automation and job cuts
Amazon CEO Andy Jassy had said last summer that increased adoption of AI tools would lead to greater automation of tasks, resulting in job losses in the corporate sector. Earlier this month, executives at the World Economic Forum’s annual meeting also noted that while AI could lead to job losses, it would simultaneously create new roles.
Some industry leaders suggested that companies had already been planning workforce reductions, with AI being used as a justification. Large-scale hiring had taken place across the tech industry during the COVID-19 pandemic.
Layoffs form a small share of Amazon’s total workforce
While the total number of layoffs now stands at around 30,000, this represents only a small fraction of Amazon’s overall workforce of approximately 1.058 million employees. However, the cuts account for nearly 10 per cent of the company’s corporate workforce.
The majority of Amazon’s employees are based in fulfilment centres and warehouses, which remain largely unaffected by the latest round of job cuts.