Amazon CEO signals corporate job cuts are coming, thanks to AI

Amazon CEO Andy Jassy announced the company's extensive push into generative AI will reduce its corporate workforce in the coming years, citing efficiency gains in a memo to employees published Tuesday. The move frames job cuts as a direct byproduct of the company's massive investment in AI-driven innovation.

The fine print: “We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs,” Jassy wrote. He added that while it's hard to know the exact outcome, "we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company.”

Chief cost-cutter: The announcement is consistent with Jassy’s tenure since taking over from Jeff Bezos in 2021, a period marked by aggressive cost-cutting and the largest layoffs in the company’s history. His memo essentially puts an AI-powered rationale behind a continued drive for a leaner corporate structure.

A troubled playbook: But the strategy isn't foolproof. Research shows a majority of companies that laid off staff for automation later regretted the decision—a potential pitfall illustrated by fintech company Klarna. The company famously claimed its AI chatbot was doing the work of 700 agents, only to later recommit to the promise that customers can always speak with a human.

The bottom line: For Amazon's corporate employees, the message is clear: developing AI skills is no longer optional, but essential for survival as the company reinvents its workforce. Jassy urged staff to "embrace this change" and "become conversant in AI" to help the company evolve. The announcement lands amid stark warnings about AI's impact, with the CEO of Amazon-backed Anthropic predicting AI could wipe out half of all entry-level white-collar jobs. The strategy also contrasts with competitors like Google, whose CEO plans to continue hiring new engineers by arguing AI allows them to do more. Meanwhile, a recent study highlights a potential roadblock to these top-down plans: nearly a third of employees are actively refusing to use AI tools out of fear and dissatisfaction.

Reading Recap:

• Read the full memo from CEO Andy Jassy

• An analysis of Jassy's cost-cutting era

• Details on Amazon's multi-billion dollar AI investments

• A deep dive on AI's impact on customer experience