Amazon axes 16,000 jobs as it pushes AI and efficiency

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Amazon said on Tuesday it was closing its remaining bricks-and-mortar Fresh grocery stores and Go markets, despite years of effort, and said it was dropping its Amazon One biometric payment system, which scans the palm of a customer’s hand.

Although 30,000 represents a small portion of Amazon’s 1.58 million employees, who are mostly in fulfillment centers and warehouses, ‌it is nearly 10% of its corporate workforce and represents the largest job cuts in its three-decades, surpassing ​the 27,000 it pared between late 2022 and early 2023.

The job cuts were necessary to strengthen the company by “reducing layers, increasing ownership, and removing bureaucracy” at Amazon, its top human resources executive, Beth Galetti, said in a post.

Galetti left open the possibility of further reductions, saying some teams ‍will continue to “make adjustments as appropriate”.

Amazon has also said it overhired during the COVID-19 pandemic, when demand for online shopping skyrocketed.

“Some ⁠of you might ask if this is the beginning of a new rhythm – where we announce broad reductions every few months,” Galetti said in ‍Wednesday’s note. “That’s not our plan,” she said.

‘PROJECT DAWN’

The full scope of the cuts could not be learned, but employees from multiple AWS units, the Alexa voice assistant, Prime Video, devices, advertising and last mile delivery, among others, indicated online and in emails to Reuters that they had be impacted.

The job ⁠cuts also underscore how artificial intelligence ⁠is changing corporate workforce dynamics. Significant ​improvements in AI assistants are helping enterprises execute duties from routine administrative tasks to complex coding problems with rapid speed and precision, driving widespread adoption.

Jassy said last summer that rising use of AI tools would mean more automation of duties, leading to corporate job losses.

Amazon has been investing in robotics at ‍its warehouses to speed up packaging and deliveries for its e-commerce segment, reduce reliance on human labor and cut costs.

Shares in Amazon, which is set to report quarterly results ​next week, were up less than 1% in pre-market trading.

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