AI, not cost, were the reasons behind the layoffs

Amazon laid off 14,000 corporate employees earlier this week, one of the biggest job cuts In the history of the company. Now CEO Andy Jassy is clarifying why the job cuts happened in the first place, saying AI and finance had nothing to do with the decision – it was all about culture fit.

Amazon of the world second largest About private employer 1.5 million employeesWhich also includes the people working in its warehouses. The company has almost doubled its workforce in six years, from 798,000 global employees in 2019 to 1.5 million in June this year. stock analysisAbout this 350,000 The employees work for its corporate operations, meaning the recent plan to cut 14,000 corporate jobs affects about 4% of Amazon’s corporate workforce.

Jassi said during Amazon quarterly earnings call It said Thursday that the layoffs were largely driven by Amazon’s desire to reshape its internal culture. Amazon’s goal is to “work like that.”world’s biggest startup,” according to Jassi.

“What we announced a few days ago was not really financially driven, and it’s not really AI-driven, at least not yet,” Jassi said on the call. “It’s really – it’s the culture.”

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Jassi said on the call that Amazon’s rapid growth in recent years has created “too many layers” that have hindered or slowed down decision-making.

On the call, JC emphasized a more agile and accountable culture with fewer layers of management. He explained some of the pitfalls of a huge corporate culture, and pointed out that when a company becomes too large and complex, it can make matters more difficult for the people “doing the real work”. According to the CEO, the extra layers could drag down the entire operation instead of helping it move faster.

“Sometimes, without realizing it, you can dilute the ownership of the people who are doing the real work for you,” Jassy said on the earnings call. “And that can slow you down. As a leadership team, we’re committed to working like the world’s biggest startups, and that means removing layers.”

The result of the layoffs that Amazon reported was predictable $1.8 billion Severance spending for the most recent quarter represents the largest job cuts since the company ended 27,000 posts In late 2022 and early 2023. Amazon has made dozens of cuts in its communications and sustainability departments this year, Equipment and Service UnitAnd Books Division.

Jassy’s approach mirrors a broader trend among other major tech firms like Google and Microsoft, which have also made layoffs this year by shedding layers of management. In April, Google laid off hundreds of employees in the department that worked on the Chrome browser and Pixel phones. In May and July, Microsoft announced layoffs collectively affecting 15,000 employees.

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While AI may not be the reason for this month’s job cuts, Jassy warned employees in a memo earlier this year that he expected Amazon’s corporate workforce to eventually shrink as AI takes over. Amazon has already given its customer service chatbot AI capabilities, Jassy wrote. He also said that AI has enabled the company to put more detailed product pages on its site.

Amazon posted earnings For the year’s third quarter, reports on Thursday showed sales surpassed $180 billion in the previous quarter, as profit rose 38% to $21.2 billion.

amazon share Up more than 11% at the time of writing today.

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Amazon CEO Andy Jassy says there’s one quality that contributes an ’embarrassing amount’ to being successful

Amazon laid off 14,000 corporate employees earlier this week, one of the biggest job cuts In the history of the company. Now CEO Andy Jassy is clarifying why the job cuts happened in the first place, saying AI and finance had nothing to do with the decision – it was all about culture fit.

Amazon of the world second largest About private employer 1.5 million employeesWhich also includes the people working in its warehouses. The company has almost doubled its workforce in six years, from 798,000 global employees in 2019 to 1.5 million in June this year. stock analysisAbout this 350,000 The employees work for its corporate operations, meaning the recent plan to cut 14,000 corporate jobs affects about 4% of Amazon’s corporate workforce.