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Amazon cuts 16,000 jobs to push AI and efficiency

Amazon announced 16,000 corporate job cuts on Wednesday. This completes a plan of around 30,000 jobs since October. However, the company has left open the possibility that there could be further reductions. Last week, it was reported that Amazon planned to cut a second batch of jobs as part of its broader goal under Andy Jassy. Jassy has been working on reducing bureaucracy and abandoning underperforming businesses.

Amazon announced on Tuesday that it would close its remaining brick and mortar Fresh grocery stores and its Go markets despite years' worth of efforts. It also said it would drop its Amazon One biometric payments system, which scans a customer’s palm.

Amazon has cut 30,000 jobs in the last three decades. This is a smaller number than its 1.58 million workers, most of whom work in warehouses and fulfillment centers. However, this represents nearly 10% of their corporate workforce. It's also more than 27,000 cuts made between 2022 and 2023.

Beth Galetti said that the job cuts at Amazon were needed to "reduce layers, increase ownership, and remove bureaucracy", according to a blog post by its top executive in human resources.

Galetti said that some teams will continue to make "adjustments as appropriate" and Galetti did not rule out further reductions. These latest layoffs are the second major round in just three months, after Amazon cut 14,000 jobs last October. At the time, the company blamed artificial intelligence and concerns over changing corporate culture.

Amazon also admitted that it hired too many people during the COVID-19 epidemic, when online shopping soared.

In a note on Wednesday, Galetti stated that "some of you may wonder if we are starting a new rhythm where we announce large reductions every few month." She said, "That's just not our plan."

Amazon sent an incorrect email on Tuesday to Amazon Web Services employees, referring to the layoff plans as "Project Dawn". This caused confusion and upset for thousands of workers. Employees from various AWS units including Prime Video, Alexa, devices, advertising, and last-mile delivery have indicated that they were affected. Other?roles that were affected included those in Kindle, and supply chain optimization within Amazon's Fulfillment unit. Amazon did not reply to a?request for comment after it announced its plans to shut down the Fresh and Go stores on Tuesday.

Job cuts are also a sign of how AI is changing the dynamics of corporate workforces. AI assistants have made significant improvements, allowing enterprises to perform tasks from simple administrative?tasks up to complex coding issues with speed and precision. This has led them become more widely adopted.

Jassy stated last summer that the increasing use of AI tools will lead to more automation, which in turn would result in corporate job losses. Two executives at the World Economic Forum annual meeting in Davos stated last week that AI will be used to justify companies cutting jobs. Amazon, Facebook's Meta Platforms, and Microsoft have all increased their hiring in response to the COVID-19 demand surge. They are also currently restructuring. UPS, Pinterest, and ASML have all announced recent staff reductions.

Amazon invests in robotics for its warehouses, to increase the speed of packaging and delivery and reduce the reliance on labor. Amazon shares, which are set to release quarterly results next Monday, fell 2.1% during regular trading on Wednesday. (Reporting and editing by Arun K. Koyyur and Nick Zieminski in Bengaluru, and Deborah Sophia and Zaheer Kachwala from Bengaluru)

(source: Reuters)