Tech / New era of AI at Amazon makes first delivery: the loss of 14,000 corporate jobs

© Cosmin Constantin Sava

“Agentic AI will mean job losses for the individual.”  

So Flexport president Sanne Manders told The Loadstar earlier this year – although he added that Flexport itself was hoping to use AI for growth in a way that did not result in fewer jobs. 

“But yes, there will be a lot of losers in the industry. That’s the reality of AI,” he warned.

And so it comes to pass. 

This morning, Beth Galetti, Amazon’s SVP people experience and technology, sent a letter to staff explaining why the company is to lose 14,000 management jobs. 

Essentially it’s due to AI; as CEO Andy Jassey told staff in June: “As we roll out more generative AI and agents, it should change the way our work is done.”  

He warned them then: “We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs. It’s hard to know exactly where this nets out over time, but in the next few years, we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company.” 

Today, Ms Galetti noted that those changes had already started. She wrote: “Many of you have put significant effort into that work of strengthening your organisations by reducing layers, increasing ownership, and helping reduce bureaucracy. We’re already seeing the results…  

“The reductions we’re sharing today are a continuation of this work to get even stronger by further reducing bureaucracy, removing layers, and shifting resources to ensure we’re investing in our biggest bets and what matters most to our customers’ current and future needs. 

“While this will include reducing in some areas and hiring in others, it will mean an overall reduction in our corporate workforce of approximately 14,000 roles.” 

However, not everyone agrees with that number. Three sources told Reuters the loss could be as many as 30,000 jobs – some 10% of Amazon’s 350,000 corporate staff. (In its last large staff cut, in 2022/3, 27,000 corporate roles went)

Ms Galetti added that next year, while continuing to hire “in key strategic areas”, Amazon would also be on the lookout for “additional places we can remove layers … and realise efficiency gains”. 

Amazon is of course a huge entity, with more than 1.5m staff globally, so 14,000 is minimal in relative terms. 

But it does add a good dollop of fuel to the fire of how AI impacts the jobs market – and the likelihood of other large organisations following suit. 

“Some may ask why we’re reducing roles when the company is performing well,” wrote Ms Galetti.  

“What we need to remember is that the world is changing quickly. This generation of AI is the most transformative technology we’ve seen since the internet, and it’s enabling companies to innovate much faster than ever before (in existing market segments and altogether new ones). We’re convinced 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.” 

She’s not wrong about the company performing well. While it reports its third-quarter numbers on Thursday, its half-year net profit was more than $35bn – up some 48% on 2024. 

“Amazon cutting jobs while registering astronomical profits shows everything that’s wrong with the business,” said GMB union national secretary Andy Prendergast today. 

“[CEO Jeff] Bezos can spend billions launching celebrities into space and takeover Venice for his wedding, but he can’t treat his loyal workforce with dignity.” 

His comments are unlikely to be alone in pointing out that profits could support people.  

But people are messy and expensive. A very quick look at Amazon’s court cases in the US – of which there are a significant number – shows three class actions filed against the firm in the past couple of days, including buyers of “a poorly made” lithium battery product claiming fraud and negligence, and an accusation of racketeering over the way Amazon treats its ‘delivery service partners’. The more people you have, the greater the number of unhappy ones. 

Amazon is an unwieldy organisation, and one that, no doubt, would love to simplify. And as one of the most technologically advanced companies in the world, its lessons will be much studied by others.  

And it is not alone. In June, Dario Amodei, CEO  of AI company Anthropic, said: “AI could wipe out half of all entry-level white-collar jobs — and spike unemployment to 10% to 20% in the next one to five years. 

“It’s going to happen in a small amount of time — as little as a couple of years or less,” he said. 

In July, Australia’s WiseTech Global said it was cutting roles as part of a workforce review, to focus on “maximising efficiency via automation and use of artificial intelligence”. 

And UPS, which reports its Q3 results today, has cut some 43,000 positions over three years through strategic AI and machine-learning implementations. 

The heat is on for white-collar workers. This Amazon announcement feels likely to be just another job cuts moment, of many still to come.