Amazon CEO Andy Jassy says the corporate’s newest huge spherical of layoffs — about 14,000 company jobs — wasn’t triggered by monetary pressure or synthetic intelligence changing staff, however relatively a push to remain nimble.
Talking with analysts on Amazon’s quarterly earnings name Thursday, Jassy stated the choice stemmed from a perception that the corporate had grown too huge and too layered.
“The announcement that we made a number of days in the past was probably not financially pushed, and it’s not even actually AI-driven — not proper now, a minimum of,” he stated. “Actually, it’s tradition.”
Jassy’s feedback are his first public rationalization of the layoffs, which reportedly may finally whole as many as 30,000 folks — and can be the most important workforce discount in Amazon’s historical past.
The information this week prompted hypothesis that the cuts had been tied to automation or AI-related restructuring. Earlier this yr, Jassy wrote in a memo to workers that he anticipated Amazon’s whole company workforce to shrink over time because of effectivity positive aspects from AI.
However his feedback Thursday framed the layoffs as a cultural reset aimed toward retaining the corporate fast-moving amid what he known as “the expertise transformation occurring proper now.”
Jassy, who succeeded founder Jeff Bezos as CEO in mid-2021, has pushed to cut back administration layers and remove forms inside the corporate. Amazon’s company headcount tripled between 2017 and 2022, based on The Data, earlier than the corporate adopted a extra cautious hiring strategy.
Bloomberg Information reported this week that Jassy has instructed colleagues components of the corporate stay “unwieldy” regardless of efforts to streamline operations — together with vital layoffs in 2023 when Amazon lower 27,000 company staff in a number of phases.
On Thursday’s name, Jassy stated Amazon’s speedy development led to further layers of administration that slowed decision-making.
“When that occurs, generally with out realizing it, you’ll be able to weaken the possession of the folks that you’ve got who’re doing the precise work and who personal many of the two-way door selections — those that must be made rapidly and proper on the entrance line,” Jassy stated, utilizing a phrase popularized by Bezos to assist decide how a lot thought and planning to place into huge and small selections.
The layoffs, he stated, are supposed to restore the type of possession and agility that outlined Amazon’s early years.
“We’re dedicated to working just like the world’s largest startup,” Jassy stated, repeating a line he’s used just lately.
Given the “transformation” he described occurring throughout the enterprise world, Jassy stated it’s extra essential than ever to be lean, flat, and fast-moving. “That’s what we’re going to do,” he stated.
Jassy’s feedback got here as Amazon reported quarterly income of $180.2 billion, up 13% year-over-year, with AWS income development accelerating to twenty% — its quickest tempo since 2022.
Amazon stated it took a $1.8 billion severance-related cost within the quarter associated to the layoffs.
Amazon joins different tech giants together with Microsoft which have trimmed headcount this yr whereas investing closely in AI infrastructure.
Associated protection:
- Amazon layoffs hit software program engineers hardest in Washington
- Amazon inventory soars 11% after topping Q3 estimates with $180B in income, $21B in earnings
