Amazon cuts about 16,000 jobs

(AP):

Amazon is slashing about 16,000 corporate jobs in the second round of mass layoffs for the ecommerce company in three months.

The tech giant has said it plans to use generative artificial intelligence (AI) to replace corporate workers. It has also been reducing a workforce that swelled during the pandemic. Beth Galetti, a senior vice president at Amazon, said in a blog post on Wednesday that the company has been "reducing layers, increasing ownership, and removing bureaucracy". The company did not say what business units would be impacted, or where the job cuts would occur.

The latest reductions follow a round of job cuts last October, when Amazon said it was laying off 14,000 workers. While some Amazon units completed those "organisational changes" in October, others did not finish until now, Galetti said. She said US-based staff would be given 90 days to look for a new role internally. Those who are unsuccessful or don't want a new job will be offered severance pay, outplacement services and health insurance benefits, she said.

CEO Andy Jassy, who has aggressively cut costs since succeeding founder Jeff Bezos in 2021, said in June that he anticipated generative AI would reduce Amazon's corporate workforce in the next few years. Meanwhile, Amazon and other big tech and retail companies have cut thousands of jobs to bring spending back in line following the COVID-19 pandemic. Amazon's workforce doubled as millions stayed home and boosted online spending. California's workforce agency said on Wednesday that it hasn't yet received a warning notice from Amazon, which would be required if the company is making large-scale layoffs there. State employment agencies in Washington, where Seattle-based Amazon is headquartered, and Virginia, where it has a major office, didn't immediately report any warning notices in their states.

Several economic studies have predicted that higher-paying jobs in computer work and engineering are among the most susceptible to being transformed by generative AI systems that can help write code. But research last week by the Brookings Institution also showed that workers in those technology roles also are more likely to have the education, skills and savings that enable them to more easily transfer into another job. The same study shows there are also millions of workers in the US who are both heavily exposed to AI and less equipped to adapt.

Hiring has stagnated in the US and last December. The country added a meagre 50,000 jobs, nearly unchanged from a downwardly revised figure of 56,000 in November. Labour data points to a reluctance by businesses to add workers even as economic growth has picked up. Many companies hired aggressively after the pandemic and no longer need to fill more jobs.