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Amazon’s 14,000 layoffs aren’t about money or AI, CEO says ‘it’s something else’
The layoff announcement, he told analysts on Thursday’s earnings call, was “not really financially driven, and it’s not even really AI driven, not right now."
Amazon chief executive officer (CEO) Andy Jassy opened up on the company's decision to cut 14,000, reason for which he said is neither money nor what was being commonly believed, AI.
The layoff announcement, he told analysts on Thursday’s earnings call, was “not really financially driven, and it’s not even really AI driven, not right now. It’s culture", according to a CNN report.
This came as Amazon reported a 13 per cent year-on-year jump in quarterly revenue to $180 billion.
Jassy said that as Amazon expanded its workforce, footprint and business lines in recent years, “you end up with a lot more people than what you had before, and you end up with a lot more layers … sometimes without realizing it, you can weaken the ownership of the people that you have who are doing the actual work.”
Also Read | Amazon layoffs: HR head sends email to laid-off workers, reveals who will get severance allowance, other benefits
What did Andy Jassy say?
Amazon’s headcount, which hit more than 1.6 million in 2021, stood at roughly 1.5 million at the end of last year, according to SEC filings.
“It can lead to slowing you down as a leadership team,” the CNN report quoted Jassy as saying. “We are committed to operating like the world’s largest startup, and … that means removing layers,” he added.
While Amazon has framed the cuts as a move to stay “nimble” ahead of future AI-driven efficiencies, the decision has heightened anxiety about technology replacing workers.
Shares of Amazon rose 13 per cent in after-hours trading following the earnings release.
Also Read | Hit by Amazon layoffs? Here's what you need to know about severance pay, PF, gratuity, and taxes
Amazon has formally begun notifying corporate workers impacted by its layoffs.
According to internal communications obtained by Business Insider, the business promised 90 days of full pay and benefits in the notification emails workers started this week.
Role of AI in layoffs?
Earlier this week, Beth Galetti, senior vice president of People Experience and Technology at Amazon, announced the layoffs, stating that although the company's performance is still solid, it needs to run more efficiently and leanly, particularly given its heavy reliance on automation and artificial intelligence.
Meanwhile, Galetti confirmed in an internal email that workers whose positions are being removed will be compensated for 90 days in full.
Additionally, they will be able to use business resources and tools for internal communication during their non-working period.
