Amazon has accidentally announced it plans to plans to slash about 16,000 corporate jobs in favour of greater use of artificial intelligence, in the second round of mass lay-offs for the e-commerce company in three months.
The first warning many employees received of the impending announcement was a misfired internal email within the technology giant.
The email sent on Tuesday signed by Colleen Aubrey, senior vice president of applied AI solutions at AWS, wrongly said that impacted employees in the US, Canada and Costa Rica had already been informed they lost their jobs.
In Slack messages viewed by Reuters, AWS employees who received the email said the Wednesday meeting was almost immediately cancelled. Amazon referred in the email to the lay-offs as “Project Dawn”.Â
“Changes like this are hard on everyone,” Ms Aubrey wrote in the email, reviewed by Reuters.
“These decisions are difficult and are made thoughtfully as we position our organisation and AWS for future success.”Amazon cuts 14,000 jobs as it ramps up AI push
News of the lay-offs was later officially confirmed by the company via a blog post from Beth Galetti, a senior vice president at Amazon, who said Amazon has been “reducing layers, increasing ownership, and removing bureaucracy”.Â
The tech giant has said it plans to use generative artificial intelligence to replace corporate workers.
It has also been reducing a workforce that swelled during the pandemic.
The company did not say what business units would be impacted, or where the job cuts would occur.
Latest round of post-pandemic cuts
The latest reductions follow a round of job cuts in October, when Amazon said it was laying off 14,000 workers. While some Amazon units completed those “organisational changes” in October, others did not finish until now, Ms Galetti said.
She said US-based staff would be given 90 days to look for a new role internally. Those who are unsuccessful or don’t want a new job will be offered severance pay, outplacement services and health insurance benefits, she said.
“While we’re making these changes, we’ll also continue hiring and investing in strategic areas and functions that are critical to our future,” Ms Galetti said.
Big tech giants are increasingly embracing and pushing artificial intelligence. (ABC News: John Gunn)
Chief executive Andy Jassy, who has aggressively cut costs since succeeding founder Jeff Bezos in 2021, said in June that he anticipated generative AI would reduce Amazon’s corporate workforce in the next few years.
The lay-offs announced Wednesday are Amazon’s biggest since 2023, when the company cut 27,000 jobs.
Amazon and other Big Tech and retail companies have cut thousands of jobs to bring spending back in line following the COVID-19 pandemic. Amazon’s workforce doubled as millions stayed home and boosted online spending.
The job cuts have not arrived with a company on shaky financial ground.
In its most recent quarter, Amazon’s profits jumped nearly 40 per cent to about $US21 billion ($29 billion) and revenue soared to more than $180 billion.
Late last year after lay-offs, Mr Jassy said job cuts were not driven by company finances or AI.
“It’s culture,” he said in October.
“And if you grow as fast as we did for several years, the size of businesses, the number of people, the number of locations, the types of businesses you’re in, you end up with a lot more people than what you had before, and you end up with a lot more layers.”
US employers cautious
Hiring has stagnated in the US and in December, the country added a meagre 50,000 jobs, nearly unchanged from a downwardly revised figure of 56,000 in November.
US labour data points to a reluctance by businesses to add workers even as economic growth has picked up.
Many companies hired aggressively after the pandemic and no longer need to fill more jobs.
Others have held back due to widespread uncertainty caused by President Donald Trump’s shifting tariff policies, elevated inflation, and the spread of artificial intelligence, which could alter or even replace some jobs.
Jobs data suggests US companies are enacting hiring freezes. (AP: Yuki Iwamura)
While economists have described the labour situation in the US as a “no hire-no fire” environment, some companies have said they are cutting back on jobs, even this week.
On Tuesday, UPS said it planned to cut up to 30,000 operational jobs through attrition and buyouts this year as the package delivery company reduces the number of shipments from what was its largest customer, Amazon.
That followed 34,000 job cuts in October at UPS and the closing of daily operations at 93 leased and owned buildings during the first nine months of last year.
Also on Tuesday, Pinterest said it plans to lay off under 15 per cent of its workforce, as part of broader restructuring that arrives as the image-sharing platform pivots more of its money to artificial intelligence.
Shares of Amazon Inc., based in Seattle, rose slightly before the opening bell in New York on Wednesday morning, local time.
AP/Reuters