Amazon’s 14,000 Layoffs Underscore AI’s Uncertain Impact on Jobs
On Tuesday, Amazon laid off 14,000 employees in an effort to improve operations by removing layers of bureaucracy, according to a company announcement posted by Senior Vice President of People Experience and Technology, Beth Galetti.
“We want to operate like the world’s largest startup,” Galetti wrote. “The reductions we’re sharing today are a continuation of this work to get even stronger by further reducing bureaucracy, removing layers, and shifting resources to ensure we’re investing in our biggest bets and what matters most to our customers’ current and future needs.”
The Seattle-based retail and web-hosting giant announced $167 billion in revenue in Q2 2025, following 2024 revenue of $637 billion. It has around 350,000 corporate employees, according to Reuters, which broke the news of this round of layoffs, which was the largest among major tech employers since 2020.
“Some may ask why we’re reducing roles when the company is performing well,” Galetti wrote. “The world is changing quickly. This generation of AI is the most transformative technology we’ve seen since the Internet, and it’s enabling companies to innovate much faster than ever before… we need to be organized more leanly, with fewer layers and more ownership.”
Why It Matters
In June, Amazon CEO Andy Jassy signaled workforce restructuring coming as a result of emerging technology and changing markets. The company’s Q3 earnings call is scheduled for October 30.
“We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs,” Jassy said in a memo, adding that in “the next few years, we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company.”
Salesforce CEO Marc Benioff also indicated in July that AI is reshaping his company’s workforce. After a round of layoffs in September, Benioff said AI is decreasing his need for customer support staff.
“I’ve reduced it from 9,000 heads to about 5,000, because I need less,” he said, according to CNBC.
Salesforce has shared with Newsweek that it has developed internal programs to help employees upskill around AI, including how it matters for their current role and how they can train their way into different, future-oriented roles.
Amazon’s latest announcement adds to the fervor around emerging technology’s potential to sharply decrease the need for office workers, leading to fears of large-scale job loss. It also carries long-run costs that don’t always benefit the company. An October 28 memo from Gartner points out that although “65% of organizations have engaged in multiple rounds of cost cutting in recent years, only 11% of organizations managed to sustain their cost reductions into a third year.”
There are other long-run costs associated with layoffs as well.
“Employees who feel undervalued or disposable stop taking risks, stop innovating, and start looking for a way out. The cultural costs, including loss of institutional knowledge, psychological safety, and engagement fester over time and almost always outweigh the temporary financial benefits,” Chris Kaufman, co-founder of StockX, told Newsweek.
What To Know
Microsoft, Target and John Deere are among the major companies making recent cuts.
“Is Amazon truly becoming more efficient, or are they taking a big risk? We don’t know yet,” Lisa LaViers, an assistant professor of accounting at Tulane University’s A.B. Freeman School of Business, told Newsweek. “What is clear is that if the layoff is truly about announcing innovation, and they are saying that they have innovated a way to do more with less.”
It may be risky, as LaViers implies, because the company is freeing up money and absorbing hits to morale to further invest in an unproven solution for the future of work.
“Layoffs impact employee morale in a negative way. Nobody wants to see their friends get fired and… there would be a concern that there’s going to be a future layoff,” LaViers continued. “That’s going to make employees feel less secure in their jobs, and they may go look for other jobs.”
Fears of large-scale job loss due to AI adoption may not be fully founded, as the link between AI and increased productivity is far from proven right now. Moreover, AI adoption is not directly meant to replace people or jobs, but in many cases to make them more productive. But that goal has not yet been fully realized.
“We have not seen the vast majority of companies realizing large scale AI-driven productivity gains yet,” Caroline Walsh, managing vice president in the HR practice at Gartner, told Newsweek. “This is something where companies are doing layoffs, and…they’re alluding to AI as something that’s part of the calculation. But most companies, unless they’re really hiding it, are not getting those productivity gains that we would expect to really enable these mass reductions in force.”
For further evidence, Walsh pointed to recent Gartner research, which found that “only one in three AI initiatives really boosts productivity. Only one in five actually delivers a measurable ROI, and only one in 50 delivers transformational value. So AI is not yet, really, delivering those business outcomes that matter.”
Additionally, some argue that tech companies are mentioning AI in layoff announcements, which they are doing voluntarily, LaViers points out, because they are also interested in promoting its powers. Given their significant investments in AI talent, infrastructure and marketing, it’s not an unreasonable theory.
“They’re an AI company, and so are they trying to signal that they can be a leader and that they can, too, have hope in the future and where things are going. So, there may be some signaling there to the market that is based in hopes and expectations,” Walsh said.
The Alphabet Workers Union (AWU), which represents employees of Google and its parent company, released a statement in reaction to Amazon’s recent workforce reduction.
“When corporate giants like Amazon decide to perform extensive layoffs despite reporting massive profits, it quickly spreads fear and uncertainty throughout our entire industry,” it wrote. “It is indefensible for Amazon to lay off 14,000 workers while simultaneously acknowledging the company is ‘doing well’ – a massive understatement given Amazon posted record profits last year of over $332 billion, a 14% increase year over year.”
Luke Koslosky, senior analyst for the Georgetown Center for Security and Emerging Technology, told Newsweek that the strength of labor organizing is a key lever in protecting employees from layoffs and AI replacement. But employers, investors and major companies will do what they can to chase the incentives in front of them.
“These are publicly owned companies,” he explained. “The stock market is very bullish on AI. In the scenario where AI is extremely impactful, like, they want to be leading the charge and driving productivity gains and profitability and being on the cutting edge of transformation driven by AI.”
In a statement sent to Newsweek, the AWU added: “There is a harsh juxtaposition between the hard work and effort it requires of an individual to even be considered for a job at a big tech company like Amazon or Google and the cruelty of laying off thousands and thousands of these individuals in as impersonal of a manner as a text message or email…It is waking up many tech workers to the reality that, despite these companies’ highly publicized office perks, at the end of the day, we are at-will employees without any power in the workplace – unless we organize.”
What People Are Saying
Alphabet Workers Union (AWU), in a public statement: “This is not a responsible business decision; it’s a callous move that puts profits above the livelihood of thousands, throwing their families and communities into deep uncertainty amid an already difficult job market. Amazon justifies mass layoffs with the reasoning of “running leanly,” but we know what that actually looks like: firing knowledgeable workers and degrading the experience for customers and end users.”
AWU continued, in a statement sent to Newsweek: “We see this reduction of headcount as a way that management can further control employees and squeeze profits out of a smaller workforce, with AI as a useful excuse. … AI is everywhere in our workplace now. Many of us do use the technology and find it helpful, but it would be difficult to find a tech worker at Google who believes that AI is anywhere near capable of replacing workers entirely…yet it’s clear that tech executives see the hype around AI as an opportunity to raise expectations, squeeze more work out of a smaller set of staff, and ultimately gain more profits, all at the expense of the very people who keep these companies running.”
Erin DeVito, General Manager, North America at the advisory firm Impact: “We run the risk of too many companies crash-dieting their way to ‘efficiency,’ cutting people and automating without understanding the long-term nutritional needs of their culture. Creating efficiency by overtaxing other systems only throws the organization further out of balance. Real efficiency needs to be mindful and intentional — pairing technology with human leadership skills to make work healthier and build lasting balance, strength, and resilience.”
StockX co-founder Chris Kaufman. “When companies begin to view people as expenses to cut instead of assets to cultivate, they make decisions that may look good on a balance sheet but can end up being disastrous in the long run. Reductions in force often deliver a short-term bump in stock price or profits, but they work to deplete an organization’s trust, creativity, and momentum. … Long-term minded leaders understand that employees are assets, not liabilities. The value of people compounds through experience, innovation, and creativity. You can’t cost-cut your way to a thriving company.”
