Amazon to cut 30,000 corporate jobs in largest-ever layoffs: Here’s what to know

When it comes to the US, Amazon is its second-largest private employer and has a strength of 1.54 million (15.4 lakh) workers worldwide. While a majority of its workforce comprises warehouse staff, corporate employees number about 3,50,000. 

In the last two years, Amazon has been on a layoff spree with job cuts across multiple divisions, including communications, devices, and podcasting. The job cuts this week will reportedly impact numerous divisions, including human resources, also known as People Experience and Technology or PXT, operations, Amazon Web Services (AWS), and devices and services. 

According to Reuters, Amazon has asked the managers of the impacted teams to undergo training on Monday on communication with staff. Amazon CEO Andy Jassy is reportedly pushing for layoffs due to what he has described as reducing excess bureaucracy. The CEO has also set up an anonymous complaint line for identifying inefficiencies, which he said has generated about 1,500 responses and over 450 process changes. Earlier this year, Jassy had also said that the rapid proliferation of AI tools would result in more job cuts.  

The latest round of job cuts also indicates how the tech giant is realising AI-driven productivity gains within its corporate teams. Amazon has reportedly come under intense pressure to quickly recover the costs of its heavy spending on AI infrastructure.

This year, so far, 216 tech companies have laid off 98,344 employees. Intel, Microsoft, and TCS have been leading the pack with tens of thousands of layoffs. Now with Amazon announcing over 30,000 job cuts, the e-commerce giant is likely to be one to layoff the most employees this year. 

What are the reasons behind the tech industry’s layoffs?

Firstly, there is no simple answer to this. A combination of structural and strategic reasons, rather than a single cause, have driven the layoffs this year. As mentioned numerous times before and widely documented, the post-pandemic surge in hiring across many tech companies led to inflated headcounts in domains with slower growth. With demand coming back to normal pace, companies found themselves to be overstaffed and faced acute margin pressure. 

Secondly, major tech companies have been increasingly investing resources in artificial intelligence, automation, and other high-growth areas such as cloud services and data infrastructure, etc. This meant that roles that were once related to legacy products, middle management, or administrative/support functions virtually became redundant. 

Moreover, there have been increasing interest rates, inflation, disruptions in supply chains, and global economic uncertainty. All of these factors have tightened the budgets and pushed companies to cost optimisation. Consequently, companies have been limiting their spending, merging teams, eliminating unnecessary roles, and reorganising their workforce to go leaner and more agile.

There is also this heightened need to improve operational efficiency, leading to change in structural design, flattening hierarchies, and ensuring that there are fewer layers of management and more focus on direct engineering or production. Reportedly, some hardware and device divisions have been facing slowing demand, such as PCs, devices, and older business lines, and this workforce reduction is targeting those units. 

Overall, these layoffs reflect both cost cuts and proactive repositioning for a technology landscape that is increasingly focused on AI and automation.