Amazon is cutting 16,000 jobs to focus on artificial intelligence
In a move reflecting the major shifts taking place in the global technology sector, Amazon announced on Wednesday its decision to eliminate an additional 16,000 jobs worldwide. This announcement comes as part of the implementation of the comprehensive restructuring plan unveiled by the e-commerce giant last October, which aims to streamline its operations in the face of current economic challenges.
Details of the workforce reduction plan
Amazon's senior vice president, Beth Galetti, explained in an official statement that the current wave of layoffs is primarily aimed at "reducing multiple layers of management, fostering a sense of individual accountability, and eliminating bureaucratic hurdles that can impede rapid decision-making." The company did not provide specific geographical details regarding the locations of the eliminated positions, stating only that each team will continue to evaluate its performance to ensure its ability to innovate and meet customer needs.
Media reports released in conjunction with the October announcement indicate that the total number of jobs slated for elimination could reach 30,000, representing approximately 10% of the company's corporate workforce. It is worth noting that these cuts do not affect employees in the distribution, warehousing, and logistics sectors, who comprise the vast majority of the company's 1.5 million employees.
The economic context and the shift towards artificial intelligence
Amazon's decision cannot be separated from the broader landscape of the technology sector, where major global companies are heading into what is being called the "year of efficiency." After years of intensive hiring during the COVID-19 pandemic, tech companies are facing pressure to reduce operating costs and improve profit margins. These moves coincide with a massive strategic shift towards investing in generative artificial intelligence technologies.
Previous reports have indicated that Amazon, like its Silicon Valley competitors, is redirecting its financial and human resources to support artificial intelligence infrastructure, technologies that require massive capital investment. This trend explains the reduction in administrative and traditional jobs in favor of increased spending in advanced technological development sectors.
Stay tuned for the 2025 financial results
Investors and economic analysts are now focused on February 6th, when Amazon is scheduled to announce its 2025 financial results during a live-streamed conference call. This call is expected to shed further light on the financial impact of these layoffs and how they will affect the company's profitability and future plans amidst fierce competition in the e-commerce and cloud computing markets.
