Amazon’s latest layoff wave — the largest in its 31-year history — has raised tough questions about how the company plans to innovate while eliminating the very engineering roles often viewed as its innovation engine. In October, Amazon announced more than 14,000 job cuts across its global operations. Newly released state filings now show that engineers made up the single largest group affected, underscoring a strategic shift toward leaner operations and a growing dependence on AI-driven productivity.

Engineers Take the Hardest Hit

According to WARN filings in New York, California, New Jersey and Washington, nearly 40% of the 4,700 reported cuts in those states involved engineering positions. These included software development engineers across multiple levels, applied scientists, and quality assurance roles. Notably, mid-level SDE II employees — typically central to day-to-day product building — were disproportionately eliminated.

Amazon emphasized that the layoffs were not primarily motivated by AI replacing jobs, but rather by a need to flatten its structure, remove layers of management, and speed up decision-making after a pandemic-era hiring boom.

Culture Reset and AI Reallocation

CEO Andy Jassy has repeatedly said the company must operate more like “the world’s largest startup.” That mission includes cutting bureaucracy, consolidating teams, and reallocating resources to emerging priorities — especially artificial intelligence.

HR chief Beth Galetti highlighted that Amazon wants to innovate faster with fewer layers and more ownership per team. Amazon is investing heavily in its internal AI tools and infrastructure, including the launch of Kiro, its competitor to coding assistants from OpenAI, Cursor, and Cognition. These tools allow engineering teams to work with smaller headcounts while maintaining output.

Jassy also signaled that the company’s white-collar workforce will likely shrink in the coming years as AI automates more internal workflows.

Major Divisions Impacted: Games, Ads, AI Search

Amazon’s cuts extended well beyond cloud and retail operations:

• Video Games: WARN filings show significant reductions in the San Diego and Irvine studios. The company is halting most triple-A development efforts, including MMO titles such as its “Lord of the Rings” project. Game designers, artists, and producers made up over a quarter of the layoffs in Irvine.

• AI Visual Search: Teams behind Amazon Lens and Lens Live — AI tools that allow users to shop by taking photos — were heavily hit. Software engineers and scientists in Palo Alto were among those cut.

• Advertising: Over 140 ad sales and marketing employees in New York were let go, representing about 20% of Amazon’s reported statewide cuts.

• Product and Program Managers: More than 500 roles were eliminated, reflecting Amazon’s push for fewer layers of coordination and more direct ownership by remaining teams.

More Layoffs Expected

Amazon is also expected to conduct another round of cuts in January, continuing the multi-year restructuring Jassy began when he took over in 2021.

The contradiction at the heart of Amazon’s strategy — reducing engineers while trying to accelerate innovation — reflects a broader shift across the tech world. As AI becomes more capable, companies are betting that smaller, AI-augmented teams can do the work once handled by far larger engineering organizations.