Amazon Layoffs: Massive Job Cuts Due To AI? — Beyond Tomorrow

There was big news coming out of Amazon this week, with Reuters reporting that 10% of the Big Tech bellwether’s corporate workforce would be cut. That's a massive 30,000 jobs and obviously it made headlines. Tech companies have supposedly shed nearly 1.3 lakh jobs till date this year, though many suspect the actual number is far higher.

Some accused Amazon of wanting to boost its share price with these job cuts and others blamed AI and obviously there were some knee-jerk reactions around cancelling Amazon Prime subscriptions, but there's a sense of doom in some quarters as Amazon is known to be an early mover

Is the mass 30K cull at Amazon a precursor to deeper tech industry layoffs and how many of these cuts are due to AI replacing roles?

I spoke to Sanchit Vir Gogia, chief analyst, founder and CEO at Greyhound Research who is particularly good at reading the tea leaves when it comes to tech. According to Sanchit, Amazon's job cuts are a deliberate recalibration of headcount, hierarchy, and role architecture to support a slower top line and more capital-intensive infrastructure roadmap.

"Generic management layers, loosely scoped programme functions, and compliance-avoidant middle roles are being retired in favour of fewer, sharper, high-leverage positions. Amazon is not waiting for financial pressure to force this shift. It is using its leadership position to get ahead of the market signal," he explained.

But is it the start of a new wave of cuts? Sanchit says that platform firms, cloud providers, SaaS vendors with soft profitability, and services firms tied to discretionary spend will continue to trim through the first half of calendar year 2026. Boards are no longer asking how many people can deliver a programme. They are asking how few are needed when platforms, AI agents, and feedback-linked automation take over. He feels that Amazon’s 30,000 cut is the first benchmark in a new cost architecture.

And how much of the cuts are thanks to AI impacting roles? According to Greyhound Research, artificial intelligence is a trigger and a justification, but not the sole engine behind Amazon’s layoff strategy. While AI is enabling efficiencies, Sanchit feels the deeper change is not about replacing people with tools but rather about reorganising work around systems that no longer need human mediation at every step. "Amazon is using AI not just to automate, but to reassign value," he explains.

But he also insists that this is not a one-way street. "AI is also creating urgent demand for new skill sets: policy engines, data lineage teams, model performance audit, prompt testing, and FinOps. AI reduces the middle but expands the base and tightens the top," he explained. But of course, the key question is how many new jobs in AI will replace old roles? And that is at the crux of the problem.

Sanchit has a warning for those leaders who may look at Amazon's example as an imperative for their own firms. He predicts that organisations that treat AI as a pure cost reduction will trigger friction, audit failures, and downstream bottlenecks.

And then the bigger question for us in India. How will Amazon's cut and what may be coming next impact jobs in India, especially in the context of the great Indian global capability centres boom? According to Sanchit, while there may be some softening in non-core IT roles, particularly in global functions being consolidated, he sees a sharp rise in demand for cost-optimised, AI-adjacent execution capacity. "India is positioned not as a fallback but as a strategic core. Firms are no longer looking to India to run what is cheap. They are moving foundational work here because it is scalable, controllable, and cost-disciplined," he adds.

Which is what NASSCOM has been saying for a while now — that GCCs in India are no longer peripheral delivery centres but core to operations. But that doesn't mean Indian knowledge workers can be complacent. Sanchit feels that those in roles without measurable outcome impact will be vulnerable to the same consolidation logic. "The talent that wins is that which shows readiness in model control, governance enforcement, and privacy-aligned design," explains Sanchit.

"For Amazon, this means reallocating spend to data and model reliability teams, not generalist offshore functions. The opportunity for Indian talent is not in replacement. It is in the step-up," he emphasised.

While the current Amazon job cuts are around the corporate workforce (the giant employs many, many more in blue-collar jobs), the fact that AI will not replace corporate jobs only needs to be reemphasised. Amazon's warehouses are seeing more and more automation being used and robots are not just a part of warehouses today but many factories across industries. And while driverless, autonomous vehicles still seem like a fad and are limited to some global cities, they won't remain technology demonstrators. It may seem like India with its chaotic traffic could never get driverless vehicles, but don't bet against technology. You will likely lose.

The reality is tech in warehouses, shop floors and factories are reducing the need to hire there too. Newer factories employ fewer and fewer workers. Commenting specifically on Amazon, Sanchit explained that the company is already reducing the marginal need for headcount in same-day delivery hubs and large-format fulfilment centres. “The stated aim is to avoid hiring over 500,000 roles Amazon would otherwise need in the next phase of growth. By 2028, Amazon will not need to cut warehouse roles. It will simply stop hiring them."

Moving on, lots more happened in the world of AI and here are some of the top headlines:

• AI’s Growing Demand For Resources Is Unsustainable: NTT Data Study

• OpenAI Eyes Record-Breaking $1 Trillion IPO To Fund AGI Infrastructure: Reuters

• Over 1 Million Weekly ChatGPT Chats Show Signs Of Suicidal Thoughts: OpenAI Data

• Beware! Tool Misuse To Privacy Breach—Top 10 Risks Of Agentic AI: How To Defend Yourself?

• Why Are Top AI Models Resisting Shutdown Command? US Researchers Suggest 'Survival Drive'

• OpenAI Finalizes For-Profit Plans, Microsoft Gets 27% Stake Worth $135 Billion

• Nvidia To Invest $1 Billion In Nokia In AI Networking Push

• ‘Not Real Work’: Sam Altman’s Remark On AI Replacing Modern Jobs Sparks Debate—Watch Video

• Wikipedia Vs Grokipedia: How Both Online Encyclopedias Differ

• OpenAI Offering One Year Of Free ChatGPT GO To Indian Users

• Who Is Vishal Shah, Appointed To Key AI Role By Mark Zuckerberg?

• Qualcomm Debuts Chip To Rival Nvidia In AI Accelerator Market

• Google President Bets On AI For Cancer Cure In 'Our Lifetime'

• Reliance Intelligence And Meta Partner For AI Joint Venture With 70:30 Stake

• Google To Supply Specialised Chips To Claude AI Developer Anthropic

Till next week,

- Ivor Soans