'This generation of AI is...enabling companies to innovate much faster than ever before,' says Amazon, as it confirms that 14,000 corporate roles will be laid off

Earlier today, Amazon sent an email to all its employees to explain why it needed to make "organizational changes" that would result in 14,000 corporate roles being laid off. The message carried the usual phrases one sees in missives from senior management: more leanly, fewer layers, more ownership, move as quickly as possible. The reason why all of that is now required was also laid bare, and it's AI.

The message in question came from Beth Galetti, Amazon's senior vice president of people experience and technology. In it, she confirmed that the retail and server giant is reducing its workforce: "While this will include reducing in some areas and hiring in others, it will mean an overall reduction in our corporate workforce of approximately 14,000 roles."

Galetti says that Amazon's recruiting teams will "prioritize internal candidates to help as many people as possible find new roles within Amazon." The obvious questions to ask are just what roles have been laid off, and what positions are such people expected to take on?

Although the answers to these questions aren't explicitly answered in Galetti's message, there is one statement that, to all intents and purposes, does: "Some may ask why we’re reducing roles when the company is performing well. Across our businesses, we're delivering great customer experiences every day, innovating at a rapid rate, and producing strong business results.

"What we need to remember is that 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 (in existing market segments and altogether new ones). We’re convinced that we need to be organized more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business."

In other words, Amazon is replacing a range of roles with AI, and any new positions will be for the management and creation of said AI tools. If you think I'm reading too much between the lines, then don't take my word for it—Andy Jassy, the CEO of Amazon, says it is: "Those who embrace this change, become conversant in AI, help us build and improve our AI capabilities internally and deliver for customers, will be well-positioned to have high impact and help us reinvent the company."

And Amazon's job cuts might not stop at 14,000 either, as Reuters reports that up to 30,000 corporate roles will be dropped. This figure might pale against Amazon's total workforce of 1.55 million people, but it's approximately 10% of all corporate positions, including "human resources, known as People Experience and Technology or PXT; operations, devices and services; and Amazon Web Services," according to Reuters.

The fact that Amazon is reducing its workforce isn't perhaps entirely unsurprising, or at least, not in itself. For example, it's well known that Amazon overhired during the Covid-19 pandemic, to meet the enormous demands from home-bound shoppers, and that it has been trying to compensate for this over the past few years.

However, Reuters notes that AWS (Amazon Web Services), the company's most profitable sector, is underperforming compared to Microsoft Azure and Google Cloud, in terms of profit increases.

And a post on X by a user called End suggests that there's a deeper reason behind the job cuts: AWS is not buying enough GPUs to meet customer demands. AI GPUs are, of course, exceptionally expensive, and while Amazon is developing its own chips, the vast majority of customers are served through AMD and Nvidia-powered instances on its servers.

If all of this is true, it means that the AI sword that's cutting down the jobs is double-edged. One side is Amazon itself using generative systems to replace human workers, the other side is the demand for AI services via AWS. Amazon is essentially doing the former to pay for the latter.

Given the colossal cost of AI servers, 30 thousand jobs cuts may just be the tip of the iceberg.