Amazon to Cut 16,000 Corporate Positions to Trim Bureaucracy

Adam

Summary:

Amazon is cutting 16,000 corporate jobs to reduce bureaucracy and management layers, part of wider tech-sector layoffs driven by efficiency goals and increasing automation through AI.

Amazon.com Inc. is cutting 16,000 corporate jobs in an effort to remove layers of bureaucracy and “increase ownership,” becoming the latest company to target managers for layoffs in recent years.

The tech firm will offer US-based employees 90 days to search for a new role internally, as well as severance and other transition support, Beth Galetti, Amazon’s senior vice president of people experience and technology said Wednesday in a blog post.

“We’ve been working to strengthen our organization by reducing layers, increasing ownership, and removing bureaucracy,” Galetti said. She said it’s “not our plan” to announce broad staff cuts every few months and said the company would continue to “make adjustments as appropriate.”

Companies across industries have been trimming management layers in the name of becoming leaner and more productive. Last year, Microsoft Corp. cut thousands of workers with a focus on reducing management; Nissan Group of North America cut 20% of its top management positions; and Amtrak similarly targeted roughly 20% of its own top-level management.

Just as Amazon was announcing its own layoffs, the chip-making machine giant ASML Holding NV said it’s eliminating 1,700 positions largely targeting managerial roles.

The reductions take Amazon’s announced job cuts to 30,000 in three months after an initial wave in October. Chief Executive Officer Andy Jassy has repeatedly said he’s determined to cut management layers that began to concern executives after a pandemic-era hiring binge. Last year, he also warned employees that AI will shrink the workforce as Amazon automates more of its operations.

While the company employed about 1.57 million people as of Sept. 30, most of them work in warehouses. The corporate workforce comprises about 350,000 personnel, meaning the latest cuts represent about 4.6% of that headcount.

Employees were informed about the cuts earlier on Wednesday, though some had been given a heads up that they were coming. Amazon Senior Vice President Colleen Aubrey prematurely scheduled a meeting titled “Project Dawn” that referred to “impacted colleagues” based in the US, Canada and Costa Rica. The email, which said “changes like this are hard on everyone,” quickly spread on internal message boards and social media sites like Reddit where workers were discussing the anticipated job cuts.

A number of tech companies have started the year by announcing layoffs. Meta Platforms Inc. said it would eliminate more than 1,000 jobs from its Reality Labs division to redirect resources to AI wearables and phone features. Pinterest Inc. said Tuesday that it plans to cut “less than 15%” of its workforce and will reduce office space, also in an effort to shift resources toward AI. Autodesk Inc. said it will cut about 1,000 positions.

Source: Bloomberg

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