Amazon to axe 14,000 corporate jobs

Amazon has outlined plans to cut 14,000 jobs across its corporate workforce, as the company looks to reduce costs amid increased spending on artificial intelligence.

In a message to employees on Tuesday, Beth Galetti, a senior executive at the Seattle-based tech group, said Amazon needed to be “organised more leanly” to capitalise on the opportunities from AI.

The job cuts amid Amazon’s office-based staff come as chief executive Andy Jassy oversees an effort to reduce costs, having this year taken an axe to middle management to ensure the business could operate “like the world’s largest start-up”.

“We’re convicted [sic] that we need to be organised more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business,” Galetti said.

In June, Jassy said advances in AI would “reduce” the company’s corporate headcount over the next few years.

Amazon plans to plough as much as $118bn into capital expenditures this year, mainly to build data centres for AI.

The tech group is racing against cloud computing rivals Microsoft and Google to expand its AI infrastructure, as well as expanding facilities holding hundreds of thousands of its AI chips for start-up Anthropic, into which the Big Tech group has invested $8bn.

As of December 31 2024, Amazon employed about 1.5mn full-time and part-time staff across its global workforce, including warehouse workers and delivery couriers.

The cuts would amount to about 4 per cent of its corporate workforce, which is estimated to be around 350,000 staff. Amazon does not disclose a figure for its corporate headcount.

The job losses will be the biggest since Amazon cut some 27,000 staff in 2022, the year after Jassy — who previously led its cloud computing unit AWS — took over as the group’s chief executive from founder Jeff Bezos.

Amazon is set to report its latest quarterly earnings after US stock markets close on Thursday. Three months ago, Amazon’s stock fell as the company warned that high spending on AI would drag down profit in the third quarter. Amazon said operating income would be $15.5bn to $20.5bn for the latest quarter, below analysts’ prior expectations of $19.4bn.

The tech group’s revenue is forecast to increase 11 per cent to $708.8bn this year, with net income projected to hit $70.6bn, according to consensus estimates from S&P Capital IQ. That would make Amazon the largest US company by revenue, edging ahead of Walmart, which is forecast to generate $701.3bn this fiscal year, according to Capital IQ estimates.