Amazon CEO Andy Jassy defends 14,000 job cuts, says ‘not about costs or AI’ — so what’s behind it?
Amazon announced Tuesday that it plans to lay off nearly 14,000 corporate employees, just months after CEO Andy Jassy warned that Artificial Intelligence (AI) could reduce the company’s workforce.
In a surprising twist in Amazon’s quarterly earnings call on Thursday, Andy Jassy clarified that the layoffs were not related to cost cutting or the adoption of artificial intelligence. Instead, he said the affected employees did not fit into Amazon’s culture. This was his first mention of the layoffs since they were announced.
“The announcement we made a few days ago wasn’t actually financially driven, and it’s not even AI-driven at least right now,” Andy Jassy said, adding that “it’s really a culture.”
Layoffs due to culture?
Andy Jassy’s words dovetail with Amazon’s broader mission to reshape its culture this year. Business Content. It works to raise the e-commerce giant’s performance standards, ensure discipline and eliminate bureaucracy throughout the company.
During the earnings call, Jassy explained that Amazon’s rapid growth in recent years has led to the creation of “a lot more layers,” which ultimately slows down the decision-making process. He emphasized the company’s need to “work leaner and move faster,” especially amid the transformative impact of artificial intelligence across different industries.
“Sometimes, without realizing it, you can undermine the ownership of the people doing the actual work,” Jassy added. “And that can slow you down.”
Conflicting logic: Culture and AI transformation
While Jassy focused on the cultural and structural factors behind the layoffs, the initial announcement was made by Beth Galetti, Amazon’s senior vice president of human experience and technology. blog post On Tuesday – he offered a different reason.
Galetti explained that the reason behind the decrease in the number of employees despite the company’s strong performance is the rapid evolution of the world due to artificial intelligence.
“This generation of AI is the most transformative technology we have seen since the internet, allowing companies to innovate faster than ever before—in existing market segments and entirely new market segments,” Galetti wrote in the blog post.
The latest layoffs at Amazon are the largest since the company laid off 27,000 employees in late 2022. Business Content reported.
This move also points to a broader trend in Big Tech. Companies like Google and Microsoft are embracing what has been called the “Great Flattening”; shortening layers of executives to move faster and reduce corporate bloat.
In the news, Amazon also disclosed that layoffs last quarter resulted in severance costs of an estimated $1.8 billion.
