Amazon CEO says 14,000 layoffs driven by culture, not AI
What's the story
Amazon CEO Andy Jassy has clarified that the company's recent decision to lay off 14,000 employees is not a cost-cutting measure or an AI-driven move. Instead, he said it was a cultural shift aimed at making Amazon less bureaucratic and more agile. "The announcement we made a few days ago was not really financially driven, and it's not even really AI-driven," Jassy said on the company's quarterly earnings call.
Corporate philosophy
'Committed to operating like world's largest start-up'
Jassy emphasized that the layoffs are part of a "cultural reset," aimed at stripping away middle management and rediscovering Amazon's entrepreneurial energy. He said, "We are committed to operating like the world's largest start-up." This move comes as a response to what he described as "the technology transformation happening right now." The decision also seems to be aimed at reassuring investors that Amazon is acting from a position of strength rather than panic.
Corporate evolution
Restoring nimbleness and ownership
Amazon's corporate headcount increased significantly between 2017 and 2022, ballooning during its pandemic-fueled expansion. However, Jassy admits that this growth has come at a cost. He said, "When that happens, sometimes without realizing it, you can weaken the ownership of the people that you have who are doing the actual work." The layoffs are intended to restore the nimbleness and "ownership" that defined Amazon's early days.
Corporate strategy
Jassy's vision for a leaner Amazon
Jassy has been trying to modernize Amazon's internal workings since taking over from Jeff Bezos in 2021. Despite several rounds of restructuring, including significant corporate layoffs in 2023, parts of the company remain "unwieldy." His ambition is clear: a flatter, faster, more decisive Amazon. "Given the transformation happening across the business world," he told analysts, "it's more important than ever to be lean, flat and fast-moving." Earlier this year, Jassy had acknowledged that artificial intelligence will eventually make Amazon leaner.