Amazon Plans Significant Layoffs Amid AI Investment Surge

SEATTLE, Wash. — Amazon is preparing to lay off up to 15% of its human resources staff, known as the People eXperience and Technology (PXT) team, as part of a larger strategy to reduce costs while heavily investing in artificial intelligence (AI) infrastructure. Sources familiar with the situation, as reported by Fortune, indicate that the human resources division will be most affected, but other areas of Amazon’s consumer business may also see job cuts.

The total number of employees impacted and the specific timeline for the layoffs have not been disclosed. Earlier this year, Amazon made smaller layoffs in its consumer devices group and Amazon Web Services, but this new round indicates a deeper structural change as the company focuses on efficiency through AI.

Amazon intends to invest more than $100 billion in capital expenditures this year to enhance its cloud and AI capabilities for both internal operations and external clients. CEO Andy Jassy, who succeeded Jeff Bezos in 2021, stated that the future of the company will hinge on AI, suggesting that many roles may become redundant as automation increases.

In a memo to employees in June, Jassy encouraged staff to adapt to the changes brought by AI. He expressed that those who become adept at using AI and contribute positively to the technology’s growth will play a critical role in the company’s future. Jassy warned that the shift could lead to a reduction in the corporate workforce, citing expected efficiency gains.

Despite these layoffs, Amazon announced plans to hire 250,000 seasonal workers for its U.S. warehouses and logistics network ahead of the holiday season. Although Amazon’s stock has dipped slightly this year, it remains 15% higher than it was a year ago. A spokesperson for Amazon, Kelly Nantel, declined to comment on the impending layoffs.

As part of a broader push for efficiency, Amazon executives typically target a certain percentage of “unregretted attrition,” which includes employees they would be willing to lose via voluntary exit or managed layoffs. However, these upcoming cuts are framed differently from standard attrition processes.

The company previously undertook the largest layoffs in its history, cutting approximately 27,000 jobs between late 2022 and 2023, primarily due to the economic impacts of the pandemic. As Amazon continues evolving amidst changing consumer demands, the PXT division may face significant challenges as it adapts to the increased use of AI.