Amazon Reshapes Its Workforce for the AI Era

Amazon is set to cut as many as 30,000 corporate positions starting Tuesday, marking one of the largest rounds of layoffs in its history and signaling a deeper transformation toward automation and efficiency. The decision, confirmed by multiple people familiar with the matter, comes as the e-commerce and cloud computing giant seeks to rein in costs following the hiring surge during the pandemic’s e-commerce boom.

While the figure represents a small fraction of Amazon’s 1.55 million total employees, it affects nearly 10% of its 350,000 corporate staff—a move that underscores how even the most profitable tech giants are being reshaped by artificial intelligence and shifting economic realities.

The layoffs are expected to hit several major divisions, including People Experience and Technology (PXT), devices and services, operations, and the company’s cloud arm, Amazon Web Services (AWS). Managers were briefed Monday on how to handle communications with affected employees, with email notifications scheduled to begin Tuesday morning.

Cutting Bureaucracy and Boosting AI Efficiency

Under CEO Andy Jassy, Amazon has been aggressively pursuing efficiency across its sprawling corporate structure. Earlier this year, Jassy described an initiative to eliminate “layers of bureaucracy,” including a reduction in middle management positions. He also launched an anonymous internal feedback program to identify inefficiencies, which has already prompted more than 450 process changes across the company.

The latest layoffs appear to build on that mission, driven in part by growing AI integration across Amazon’s internal systems. “This latest move signals that Amazon is likely realizing enough AI-driven productivity gains within corporate teams to support a substantial reduction in force,” said Sky Canaves, senior analyst at eMarketer.

The company has invested billions in artificial intelligence infrastructure, including its Bedrock generative AI platform and large-scale data center expansion. But the payoff has been mixed—while AI adoption improves internal processes, it also threatens to displace jobs in administrative, HR, and technical support roles.

Analysts say Amazon’s strategy reflects a broader industry shift: as AI becomes embedded across operations, companies are beginning to re-evaluate human capital needs. “What we’re witnessing is a structural recalibration—AI is not just a tool but a new operating model,” said Canaves.

AWS Growth Slows as Competition Intensifies

The timing of the cuts coincides with pressure on Amazon Web Services (AWS), the company’s most profitable segment. In the second quarter, AWS revenue rose 17.5% to $30.9 billion, lagging behind Microsoft’s Azure, which grew 39%, and Google Cloud, up 32%. Estimates for the third quarter suggest a modest improvement to $32 billion, but analysts view the trend as a sign of intensifying competition in the cloud sector.

Adding to the challenge, AWS suffered a 15-hour outage last week, disrupting major online platforms such as Snapchat and Venmo. The incident raised questions about infrastructure reliability and highlighted the operational risks that come with scaling cloud systems during a period of organizational flux.

Despite the layoffs, Amazon continues to ramp up for its critical holiday season. The company announced plans to hire 250,000 seasonal warehouse workers, the same number as in the past two years, signaling confidence in consumer demand even as it trims corporate ranks.

What Lies Ahead for Amazon’s Workforce and Investors

Amazon’s restructuring is as much about future-proofing its operations as it is about short-term cost control. By leveraging automation and AI, the company is betting on higher margins and faster decision-making—but the human toll could spark cultural and reputational challenges.

Investors, however, appear optimistic. Amazon’s stock rose 1.2% to $226.97 on Monday ahead of its upcoming third-quarter earnings report, due Thursday. Analysts expect Jassy to frame the layoffs as a strategic pivot toward sustainable growth in an AI-driven economy.

Still, the real test will be whether Amazon can maintain its innovative edge while balancing technological efficiency with human capital. As Jassy pushes the company deeper into automation, the coming months will reveal whether Amazon’s leaner structure enhances agility—or exposes new vulnerabilities.