Amazon CEO Andy Jassy said the company laid off 14,000 employees because of “culture” rather than finance or AI. Jassy said this in response to an analyst question on the company’s earnings call Thursday.
Jassy explained that as Amazon added headcount, locations and lines of business in recent years, “you end up with a lot more people than what you had before, and you end up with a lot more layers … sometimes without realizing it, you can weaken the ownership of the people that you have who are doing the actual work.”
Amazon cut the employees earlier this week in the first phase of what insiders describe as a broader restructuring expected to continue into next year. The move marked one of the company’s most significant workforce shakeups, reflecting how automation and AI are reshaping roles across the tech and logistics sectors. Employees told Reuters that the layoffs span several divisions, including devices, advertising, Prime Video, human resources, and Amazon Web Services (AWS).
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Amazon’s headcount peaked at more than 1.6 million in 2021; it ended last year with around 1.5 million employees, according to SEC filings.
“It can lead to slowing you down as a leadership team,” Jassy said. “We are committed to operating like the world’s largest startup, and … that means removing layers.” Amazon also said this week that the layoffs were more about staying “nimble” in anticipation of future AI efficiencies, however, they still have sparked fears about AI replacing human workers.
Bloomberg News reported this week that Jassy has told colleagues parts of the company remain “unwieldy” despite efforts to streamline operations — including significant layoffs in 2023 when Amazon cut 27,000 corporate workers in multiple stages. Jassy also said on the Thursday call that Amazon’s rapid growth led to extra layers of management that slowed decision-making.
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“When that happens, sometimes without realizing it, you can weaken the ownership of the people that you have who are doing the actual work and who own most of the two-way door decisions — the ones that should be made quickly and right at the front line,” Jassy said, using a phrase popularized by Bezos to help determine how much thought and planning to put into big and small decisions. Jassy also added that the layoffs are meant to “restore the kind of ownership and agility that defined Amazon’s early years.”
Meanwhile, U.S. Senator Bernie Sanders urged Amazon founder Jeff Bezos to address concerns over massive job losses linked to automation. Citing a recent New York Times report, Sanders pointed out that company executives expect as many as 500,000 warehouse positions could eventually be replaced by robots, a projection he said underscores the human cost of rapid technological change.