Amazon to lay off 15% of HR team: Report
What's the story
Amazon is reportedly planning a major layoff, targeting up to 15% of its human resources division. The internal team, called People eXperience and Technology (PXT), will be the worst hit, multiple sources told Fortune. The move comes as part of a larger restructuring effort by the company to embrace automation and efficiency in its operations.
Wider impact
Other divisions may also be affected
While the HR team is likely to bear the brunt of these layoffs, other divisions within Amazon's consumer business could also be impacted. However, the exact number of employees affected and when these cuts will happen remain unclear. This comes just months after smaller layoffs in Amazon's consumer devices group, Wondery podcast arm, and Amazon Web Services (AWS).
Strategic shift
Layoffs amid AI investment surge
The layoffs come as Amazon invests billions into its artificial intelligence (AI) and cloud operations. The company has pledged to spend over $100 billion this year on capital investments, mostly for building next-gen data centers for AI infrastructure. CEO Andy Jassy has said that this new era will be defined by AI, and not all employees will transition with it.
AI transition
Embrace AI or risk being laid off, Jassy warned employees
In a company-wide memo in June, Jassy had urged employees to embrace Amazon's AI drive. He said, "Those who embrace this change, become conversant in AI, help us build and improve our AI capabilities internally and deliver for customers, will be well-positioned to have high impact and help us reinvent the company." However, he also warned that this would likely reduce the total corporate workforce as efficiency gains from extensive use of AI are expected.
Layoff history
Amazon's largest layoff under Jassy's leadership
Under Jassy's leadership, Amazon has already seen its biggest-ever layoff, cutting around 27,000 corporate roles between 2022 and 2023. These cuts were mainly due to post-pandemic overexpansion and changing consumer habits. However, this latest round of layoffs is more strategic and linked to a long-term shift toward AI-driven operations.
Hiring contrast
Holiday hiring ramp-up despite impending layoffs
Interestingly, as Amazon prepares to lay off white-collar workers, it is also ramping up its holiday hiring spree. The company recently announced plans to hire 250,000 seasonal employees across its US warehouses and logistics network for the festive season. This contrast highlights a major shift in Amazon's workforce strategy as it moves toward an AI-focused future.