Amazon to Cut About 14,000 Corporate Jobs in AI Push

Amazon.com announced on Tuesday it will reduce its global corporate workforce by about 14,000 people, with more cuts expected next year, in a major shakeup driven in part by adoption of artificial intelligence. The online retailer began laying off employees across multiple divisions as part of a plan, first reported on Monday by Reuters, to cut as many as 30,000 employees. Amazon is working to compensate for over-hiring during the peak demand of the pandemic and limit costs. The layoffs offer a potential preview of the broad effects that AI could have on workforces. Amazon CEO Andy Jassy said in June that the increased use of AI tools and agents would lead to more corporate job cuts, particularly through automating routine tasks.

Total Retail's Take: This is sobering, and potentially scary, news for many. For the last couple of years, people have held onto fears that AI was going to take their jobs. And while maybe not entirely true, what Amazon is doing and publicly stating is that yes, in some cases humans will no longer be necessary perform certain jobs, easily replaced by AI tools and agents.

For Amazon, the job cuts will impact multiple departments, including Devices, Advertising, Prime Video, HR and Amazon's cloud computing unit Amazon Web Services (AWS). The e-commerce giant is increasingly using AI to write code for its software as well as adopting AI agents to automate routine tasks. The resulting job cuts will yield cost savings and allow Amazon to innovate faster.

However, what's also true is that humans will be necessary to optimize AI usage to its full potential. Furthermore, innately human skills such as creativity, emotional intelligence, and ethical judgment cannot be fully replicated by AI. Humans are also critical for tasks requiring interpersonal relationships, leadership, and strategic thinking.