Amazon CEO Andy Jassy says the corporate’s latest big round of layoffs — about 14,000 company jobs — wasn’t triggered by monetary pressure or synthetic intelligence changing employees, however quite a push to remain nimble.
Talking with analysts on Amazon’s quarterly earnings name Thursday, Jassy mentioned the choice stemmed from a perception that the corporate had grown too huge and too layered.
“The announcement that we made a couple of days in the past was probably not financially pushed, and it’s not even actually AI-driven — not proper now, no less than,” he mentioned. “Actually, it’s tradition.”
Jassy’s feedback are his first public clarification of the layoffs, which reportedly may finally complete as many as 30,000 individuals — and could be the most important workforce discount in Amazon’s historical past.
The information this week prompted hypothesis that the cuts had been tied to automation or AI-related restructuring. Earlier this 12 months, Jassy wrote in a memo to workers that he anticipated Amazon’s complete company workforce to shrink over time as a result of effectivity positive factors from AI.
However his feedback Thursday framed the layoffs as a cultural reset aimed toward protecting the corporate fast-moving amid what he referred to as “the know-how transformation taking place proper now.”
Jassy, who succeeded founder Jeff Bezos as CEO in mid-2021, has pushed to scale back administration layers and get rid of forms inside the corporate. Amazon’s company headcount tripled between 2017 and 2022, based on The Information, earlier than the corporate adopted a extra cautious hiring method.
Bloomberg Information reported this week that Jassy has instructed colleagues components of the corporate stay “unwieldy” regardless of efforts to streamline operations — together with vital layoffs in 2023 when Amazon lower 27,000 company employees in a number of levels.
On Thursday’s name, Jassy mentioned Amazon’s speedy progress led to additional layers of administration that slowed decision-making.
“When that occurs, typically with out realizing it, you’ll be able to weaken the possession of the individuals that you’ve who’re doing the precise work and who personal a lot of the two-way door selections — those that must be made shortly and proper on the entrance line,” Jassy mentioned, utilizing a phrase popularized by Bezos to assist decide how a lot thought and planning to place into huge and small selections.
The layoffs, he mentioned, are supposed to restore the type of possession and agility that outlined Amazon’s early years.
“We’re dedicated to working just like the world’s largest startup,” Jassy mentioned, repeating a line he’s used recently.
Given the “transformation” he described taking place throughout the enterprise world, Jassy mentioned it’s extra essential than ever to be lean, flat, and fast-moving. “That’s what we’re going to do,” he mentioned.
Jassy’s feedback got here as Amazon reported quarterly income of $180.2 billion, up 13% year-over-year, with AWS income progress accelerating to twenty% — its quickest tempo since 2022.
Amazon mentioned it took a $1.8 billion severance-related cost within the quarter associated to the layoffs.
Amazon joins different tech giants together with Microsoft which have trimmed headcount this 12 months whereas investing closely in AI infrastructure.
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