Amazon Inc. is set to eliminate 14,000 corporate jobs in early 2025 as part of a cost-cutting initiative driven by advancements in Artificial Intelligence (AI), according to multiple media reports.
The decision, which represents a 13% reduction in Amazon's managerial workforce, is expected to save the company between $2.1 billion and $3.6 billion annually. Following the layoffs, the number of managers at Amazon will drop from 105,770 to 91,936.
Amazon's Workforce Strategy
Amazon CEO Andy Jassy had previously announced plans to reshape the company’s management structure by increasing the ratio of individual contributors to managers. In September 2024, Jassy stated that Amazon aimed to raise this ratio by 15% by the end of March 2025.
To achieve this, the company has instructed managers to increase direct reports, reduce senior hires, and cut compensation costs in certain cases, according to a Business Insider report from January 2025.
AI’s Role in Workforce Restructuring
AI-driven automation is at the core of Amazon’s decision to streamline operations and reduce managerial roles. However, the move has drawn criticism from industry leaders.
Gurmeet Chadha, Managing Partner and Chief Investment Officer (CIO) of Complete Circle, expressed concern over the layoffs, calling them “corporate jargon” that disregards employee welfare.
“Amazon is laying off 10,000 more people after cutting 18,000 jobs in November. They use fancy titles like ‘People Experience Head’ and call employees ‘families’—it’s all drama,” Chadha wrote on social media platform X.
He also warned about the potential negative impact of AI on jobs, stating,
“Any technology that causes misery to people is useless. Call me old school, but I value people more than anything else.”
Amazon’s Cost-Cutting Measures
The layoffs are part of a broader effort to reduce bureaucracy and increase efficiency within Amazon’s corporate structure. The company aims to flatten management layers and boost decision-making speed.
Additionally, Amazon shares were affected by the news, trading 1.28% lower at $193.36 ahead of Tuesday’s Wall Street session, compared to $195.74 at the previous market close.
Future Implications
With AI reshaping Amazon’s workforce, industry experts anticipate similar moves from other tech giants looking to leverage automation for cost savings. While Amazon seeks to position itself for long-term efficiency, concerns remain over the impact on employment in the corporate and tech sectors.
A final decision on the extent of AI-driven job cuts and further restructuring plans is expected in the coming months.
