Amazon on Tuesday said it is cutting 14,000 corporate jobs as the retailing giant relies more on artificial intelligence and moves to lower its wage bill.
Earlier this year, CEO Andy Jassy said Amazon’s investment in AI tools would allow the company to reduce its human workforce as the business becomes more efficient.
Beth Galetti, senior vice president of people experience and technology, on Tuesday said in a message shared with workers that the job cuts would allow Amazon “to operate like the world’s largest startup.”
“What we need to remember is that the world is changing quickly,” she added. “This generation of AI is the most transformative technology we’ve seen since the Internet, and it’s enabling companies to innovate much faster than ever before (in existing market segments and altogether new ones).”
Amazon is “investing quite expansively” in generative AI technology, Jassy said earlier this year. The the company has plans to invest $10 billion in a new AI “innovation campus” in North Carolina. Its AI push is aimed at integrating artificial intelligence into products such as its Alexa voice assistant, as well as in e-commerce shopping tools — although the efforts go beyond retailing.
In a conference call with industry analysts in May, Jassy said the potential for growth in the company’s Amazon Web Services cloud computing business is massive.
“In some ways, this is a tipping point away from human capital to technological infrastructure,” Neil Saunders, an analyst and managing director of GlobalData, said in an email.
The e-commerce giant is the second-largest private employer in the U.S., with about 1.5 million employees worldwide, with Walmart holding the No. 1 spot.
“The Amazon layoffs are dramatic in scale, and they represent a deep cleaning of Amazon’s corporate workforce,” Saunders added.
Even as Amazon is cutting its corporate workforce, the company earlier this month announced plans to hire 250,000 seasonal workers for warehouse and transportation work over the holidays.
