The measure affects almost ten percent of the group's 350,000 administrative employees, which employs around 1.55 million people worldwide. The background is a massive cost-cutting program initiated by CEO Andy Jassy after the overheating of the pandemic years. At that time, Amazon had hired hundreds of thousands of employees to handle the online boom – now follows the correction.
Reducing Bureaucracy and AI as Drivers
Jassy justifies the cuts with the need to streamline structures and reduce "excessive bureaucracy." The number of executives is also set to decrease. In addition, the implementation of artificial intelligence is accelerating the transformation: routine tasks are increasingly being automated, Jassy said back in the summer—a clear warning signal for many employees.
According to "Fortune" magazine, the HR department alone could lose around 15 percent of its positions. Executives were already trained on Monday to communicate the layoffs. The notices to those affected are to be sent today—via email.
Stock market reacts calmly
On Wall Street, investors reacted calmly to the news: Amazon stock rose by 1.2 percent on Monday. Apparently, the market is betting that the layoffs will reduce costs and improve efficiency in the short term.
Amazon will publish the figures for the third quarter on Thursday – an event that is likely to become a mood test for Jassy’s radical cost-cutting course.
