Amazon's Big Job Cuts and the AI Factor

Amazon is letting go of about 16, 000 corporate workers. This is the second big round of job cuts in just a few months. The company says it wants to use AI to do some of the work instead. They also want to make things simpler and get rid of extra layers in the company. Amazon didn't say which parts of the company will be affected or where the job cuts will happen. This comes after they cut 14, 000 jobs in October. Some parts of the company finished those cuts then, but others are just finishing now. Workers in the U. S. will have 90 days to find a new job inside the company. If they can't or don't want to, they'll get severance pay, help finding a new job, and health insurance. Even with these cuts, Amazon says they will keep hiring and investing in important areas. The CEO, Andy Jassy, has been cutting costs since he took over from Jeff Bezos. He said in June that AI will likely reduce the corporate workforce in the next few years. These latest cuts are the biggest since 2023, when Amazon cut 27, 000 jobs. Many big tech and retail companies are cutting jobs after the pandemic. Amazon's workforce doubled during the pandemic as more people shopped online. But now, they are cutting back. California's workforce agency hasn't received a warning notice from Amazon yet, which would be required for large-scale layoffs.Studies show that higher-paying jobs in computer work and engineering are most at risk from AI. But these workers are also more likely to have the skills and savings to find new jobs. However, there are millions of workers who are heavily exposed to AI and less equipped to adapt. Many of these workers are in administrative and clerical roles, and about 86% are women. Hiring in the U. S. has slowed down. In December, the country only added 50, 000 jobs, which is almost the same as the revised figure from November. Businesses are reluctant to add workers even as the economy grows. Many companies hired a lot after the pandemic and don't need to fill more jobs now. Others are holding back due to uncertainty caused by tariff policies, inflation, and AI. Other companies are also cutting jobs. UPS plans to cut up to 30, 000 operational jobs this year. Pinterest said it will lay off under 15% of its workforce as part of a broader restructuring. Despite the job cuts, Amazon is doing well financially. In its most recent quarter, Amazon's profit jumped nearly 40% to about $21 billion, and revenue soared to more than $180 billion.