Amazon is reported to plan to lay off thousands of employees next week, involving core departments such as AWS and retail

According to sources familiar with the matter, tech giant Amazon is planning to initiate a new round of large-scale layoffs next week, expected to involve thousands of jobs. This layoff is part of a larger plan to optimize the staffing of approximately 30,000 corporate employees.

Reuters reported that the scale of this layoff is expected to be comparable to the first round of layoffs in October last year, which may begin as early as next Tuesday. Affected departments include its core profit engine Amazon Web Services (AWS), retail business, Prime Video, and human resources. Sources told Reuters that specific details may still change.

This continues Amazon's largest layoff plan in its history. If the target of laying off 30,000 employees is fully implemented, it will account for nearly 10% of its total corporate workforce. In October last year, Amazon already cut about 14,000 white-collar positions, which was half of the total target. Those laid off are currently in a 90-day transition period, which will expire next Monday.

This layoff highlights the ongoing adjustments large tech companies are making in seeking efficiency and responding to technological changes. Amazon CEO Andy Jassy previously stated that as efficiency improves with artificial intelligence, the company's corporate workforce is expected to gradually shrink. Nevertheless, Jassy's explanation of the reasons for the layoffs presented different emphases in internal communications and earnings call, raising market attention to the company's strategic focus.

Core Departments Facing Restructuring

The layoffs will have a wide-ranging impact, touching on Amazon's most strategically significant business segments. In addition to the retail and Prime Video departments, which are under growth pressure, even the AWS cloud computing department, long a pillar of the company's profits, is not spared. Additionally, the human resources department will also be affected by this adjustment.

Although Amazon currently has about 1.58 million employees, the vast majority are distributed across logistics centers and warehouses. While the planned reduction of 30,000 positions represents a small proportion of the total workforce, its concentration in corporate functional departments means that nearly one-tenth of white-collar employees will be impacted.

This scale exceeds the company's record of cutting about 27,000 positions in 2022 and will become the largest layoff action in Amazon's 30-year history.

Reasons for Layoffs: Bureaucracy or AI-Driven?

The driving forces behind the layoffs present a certain complexity in management's statements. In October last year, Amazon linked the first round of layoffs to the rise of artificial intelligence software in an internal letter, stating that this generation of AI is "the most transformative technology since the internet," enabling the company to innovate at an unprecedented speed.

However, CEO Andy Jassy clarified to analysts in the subsequent third-quarter earnings call that the layoffs "are not really financially driven, nor are they truly driven by AI." He attributed the reasons to "cultural" factors, implying that there is too much bureaucracy within the company. Jassy pointed out, "Ultimately, you find that there are many more people than before, and the layers have increased accordingly."

Although Jassy downplayed the direct role of AI in the short-term layoff decision, the trend of companies using AI to replace human labor is irreversible. Companies are increasingly using AI to write code and deploy AI agents to automate daily tasks, reducing costs and reliance on human labor Amazon itself heavily promoted its latest AI models at the annual AWS cloud computing conference last December.

Past Layoff Progress

Amazon's current layoff plan is being implemented in phases. Approximately 14,000 employees affected last October were informed that they would retain 90 days of payroll records, during which they could apply for internal transfers or seek external opportunities. This buffer period will end this Monday, after which the company plans to initiate a second round of layoffs.

So far, Amazon spokespersons have declined to comment on the latest layoff plans