Amazon plans to cut as many as 30,000 corporate jobs starting Tuesday morning, according to a new report from Reuters that cites three unnamed people familiar with the matter.
Amazon has 1.5 million employees globally (1.2 million in the U.S.), but about 350,000 of those are corporate positions, according to Reuters. Cutting 30,000 corporate jobs represents almost 9% of Amazon’s total corporate positions.
The Reuters report cited overhiring from the pandemic as the impetus of the cuts, but not everyone seems convinced by that argument, given the fact that companies have had plenty of time to tinker with their staffing since the onset of covid in 2020. The last massive job cuts at Amazon saw 27,000 people let go in late 2022.
Analysts on CNBC debated what was behind the news on Monday, with two other likely culprits: the rise of AI and President Donald Trump’s extreme tariffs. There was strong debate for and against the case that the reported job cuts were coming due to AI, but nobody seems to really know yet. Amazon didn’t immediately respond to Gizmodo’s questions about the Reuters report emailed Monday.
The case of tariffs is easier to make, given the fact that President Trump has been so erratic in implementing them, slapping foreign goods with historically high import taxes. Just this weekend, Trump announced an additional 10% tariff on Canada because he was upset about an ad purchased on U.S. airwaves by the premier of Ontario that featured old footage of President Ronald Reagan warning against tariffs. Trump claimed the ad was AI-generated, which isn’t true.
The New York Times reported last week that Amazon has ambitious plans for robotics that will help it grow without expanding its workforce. The goal is to automate 75% of Amazon’s operations, according to the report, which could mean that it won’t have to hire 600,000 new workers it would’ve otherwise needed by 2033.
Automation has always caused job losses over the past century, whether it’s physical machines in factories or software that can improve the efficiency of white collar workers. But the hype around AI has created a new cycle in the 2020s that has everyone holding their breath. Will generative artificial intelligence prove to be a massive job killer, or will workers adapt to other positions, and things will become more efficient?
Nobody knows where it will go, obviously, even as many people predict that the AI bubble is about to burst. Anyone who knows how things will play out (and has some money to burn) has the potential to earn some big bucks in the weeks and months ahead. Some big names are reporting earnings this week, including Amazon (Thursday), Alphabet (Wednesday), and Microsoft (Wednesday).
Wall Street liked the news on Monday that Amazon was cutting jobs, as it often does. The stock closed up 1.25%. The DOW, S&P 500, and NASDAQ all closed at record highs.
