Amazon is reportedly gearing up for another significant round of layoffs. The company is expected to cut up to 15 percent of its workforce in the human resources department, internally referred to as the People eXperience and Technology (PXT) team. As reported by multiple sources in Fortune, the HR division will face the most substantial impact, although other areas of Amazon's extensive consumer operations might also experience job cuts.
The exact number of employees impacted and the schedule for the layoffs are still uncertain. This decision follows a series of smaller layoffs in the company's consumer devices division a few months ago. However, this new wave indicates a more significant reorganization of Amazon's workforce management, especially as the company shifts its focus towards automation and efficiency.
The reductions come as Amazon invests billions in its AI and cloud services. This year, the company has pledged to allocate more than $100 billion towards capital investments, with a significant portion focused on constructing advanced data centers to support AI infrastructure for both internal purposes and business clients.
Andy Jassy, who took over as CEO from Jeff Bezos in 2021, has emphasized that artificial intelligence will characterize this new phase, and not all employees will adapt. In a company-wide memo from June, Jassy encouraged employees to support Amazon's AI initiative, stating:
Individuals who adapt to this transformation, gain proficiency in AI, assist in developing and enhancing our AI capabilities internally, and deliver for clients, will be strategically placed to make a significant impact and aid in the company's reinvention.
He warned that this move would result in a reduction of our corporate workforce as we enhance efficiency by extensively incorporating AI across the company. Under Jassy's leadership, Amazon has already experienced its largest layoffs ever, eliminating approximately 27,000 corporate positions between 2022 and 2023. These layoffs were primarily due to overexpansion following the pandemic and evolving consumer behaviors, but the current phase is more strategic, linked to a long-term transformation towards AI-driven operations.
As holiday packages accumulate, layoffs increase at headquarters.
The irony isn’t lost on anyone: while Amazon prepares to let go of white-collar workers, it’s simultaneously ramping up its holiday hiring spree. The company recently announced plans to hire 2,50,000 seasonal employees across its US warehouses and logistics network to handle festive demand.
Within the organization, Jassy is recognized for his strict approach to cost management. He is noted for encouraging teams to reach a level of 'unregretted attrition,' referring to employees the company is willing to part with, either through resignations or planned departures. However, insiders suggest that the upcoming reductions are distinct from the usual attrition patterns, indicating a more extensive organizational restructuring.
As Amazon strives to enhance efficiency and focus on AI, its human resources operations might suffer significantly due to this transformation. For numerous employees within the PXT division, the signs of change may already be evident.