Amazon CEO Andy Jassy sat on a stage in a Seattle conference center in September, looking out at an audience of thousands of sellers who’d traveled from around the world to the company’s hometown.
He used the moment to lay out a vision for how he wants Amazon to operate like the “world’s largest startup,” getting rid of bureaucracy in order to move faster and stay competitive. (View Highlight)
“We’re working hard to try to flatten our organization and have fewer layers because in the very earliest days of Amazon, it’s been true for many years, we had very high ownership at every level of the organization, including on the frontline,” Jassy said at the event.
Jassy, who took the helm from founder Jeff Bezos in 2021, has embarked on a major overhaul of Amazon’s corporate culture in recent years, including a hard pivot back to in-office work, with Covid largely in the rearview mirror, and a push for employees to do more with less. (View Highlight)
The starkest example came last week, when Amazon announced it would lay off about 14,000 corporate employees and said more cuts are expected soon. (View Highlight)
“As a leadership team, we are committed to operating like the world’s largest startup,” Jassy said. “And that means removing layers.”
The next big wave of cuts is expected to start in January, CNBC has learned, after the holiday rush and Amazon’s annual re:Invent cloud conference, which is held in early December. (View Highlight)
In total, it’s expected to add up to the largest round of corporate layoffs in Amazon’s 31-year history, CNBC previously reported. Amazon has been trimming head count across the company since late 2022, resulting in more than 27,000 job cuts. Reductions have continued of late, though at a smaller scale. (View Highlight)
Amazon Web Services, the dominant cloud infrastructure provider, has come under pressure from rivals Microsoft and Google, which are growing faster. AWS is also battling a perception that it’s a laggard in signing key artificial intelligence infrastructure deals. Amazon’s $38 billion cloud agreement with OpenAI, announced Monday, could help ease some of those concerns. (View Highlight)
Meanwhile, Amazon’s 11-year-old Alexa service, an early leader in the voice assistant market, was slow to bring to market an enhanced version, with competition building from generative AI companies, namely OpenAI. (View Highlight)
Jassy has been searching for Amazon’s next opportunity, or “pillar,” for growth after e-commerce, cloud and its Prime membership program. The company has made big bets on satellite internet, health care, grocery, entertainment and self-driving vehicles, but with varying degrees of success. (View Highlight)
Jassy told investors last week that the cuts weren’t triggered by financial strain or AI replacing workers. He said he’s responding to a “culture” issue inside the company, spurred in part by a multiyear hiring spree that left it with “a lot more layers” and slower decision-making. (View Highlight)
Current and former staffers, most of whom asked not to be named in order to speak candidly on the subject, told CNBC that several years of persistent cost cutting and layoffs have damaged morale, while pressure has simultaneously been building to innovate faster, especially around AI. (View Highlight)
Jassy outlined his plan to flatten Amazon’s structure in September 2024, at the same time that he instructed staffers to return to five days a week in the office. He set a goal for each major organization inside Amazon to increase the ratio of individual contributors to managers by at least 15% by the end of the first quarter of 2025. (View Highlight)
He also established a “no bureaucracy email alias” for employees to flag unnecessary processes or rules. In September of this year, Jassy said that led to about 455 changes inside the company. (View Highlight)
A staffer in Amazon’s customer support division who was laid off last week after 15 years at the company described how the push to flatten organizations meant “they remove people but not the work.” The person said senior leadership appears “extremely disconnected from the workers.” (View Highlight)
In the memo announcing the latest layoffs, human resources chief Beth Galetti used the phrase “staying nimble” in the headline.
It quickly became a meme on internal Slack channels and in Reddit threads. One image posted on Slack shows Keanu Reeves in “The Matrix,” labeled with the word “employees,” attempting to dodge a bullet labeled “Staying nimble, getting stronger, reducing layers, shifting resources.” (View Highlight)
That’s not to say the changes are universally opposed. An AWS employee told CNBC that some organizations became too bloated and that fewer layers would help speed up decision-making. A former manager in Amazon’s retail business said the company overhired in recent years, creating too many layers of management. (View Highlight)
In June, Jassy said efficiency gains from using AI internally would shrink Amazon’s corporate staff in the coming years. The company is already reining in the growth of its white-collar workforce. (View Highlight)
At the same time, Amazon is racing to keep up with the other hyperscalers by aggressively investing in AI infrastructure. In its earnings report last week, the company said it plans to boost capital expenditures this year to 125billion,upfromanearlierestimateof118 billion. CFO Brian Olsavsky said that number will likely increase in 2026 (View Highlight)
Amazon has also pushed corporate employees to use AI in their work and regularly experiment with internal tools. The company monitors AI adoption by employees, and some staffers were counseled to use the services more to speed up their work, or were informed that their usage could be factored into performance evaluations, according to three people familiar with the matter. (View Highlight)
“We’re the workers who develop, train and use AI, so we have a responsibility to intervene,” AECJ wrote.
While Jassy is making the case that AI agents will transform work for the better and make jobs “even more exciting and fun” than they currently are, AECJ members suggest they may be planting the seeds of their own demise. (View Highlight)
Preston Arquette, who was laid off from Amazon’s e-commerce platform team last week, said he’s not “anti-AI” but he questioned whether the technology has led to tangible results inside the company.
“In my role, I didn’t see the kind of efficiencies or improvements that would make you think all these layoffs are necessary,” Arquette said in a text message. (View Highlight)
