Not AI Or Costs, Amazon CEO Cited This Reason Behind Mass Layoffs

Amazon's decision to slash 14,000 jobs this week was not about cutting costs or chasing artificial intelligence (AI) trends. Instead, it was a move to realign the company's culture, according to CEO Andy Jassy.

Speaking during the company's quarterly earnings call on Thursday, Oct. 30, Jassy commented on the layoffs for the first time. “The announcement that we made a few days ago was not really financially driven, and it's not even really AI-driven, not right now at least,” he said, according to a Business Insider report. “It really— it's culture.”

Jassy's remarks reportedly reflect his ongoing effort to reshape Amazon's internal culture this year, a push focused on raising performance standards, enforcing discipline and cutting through bureaucracy. The job cuts announced on Oct. 28 represent Amazon's largest round of layoffs since the company shed 27,000 roles in late 2022.

During Thursday's quarterly earnings call, Jassy explained that Amazon's rapid expansion in recent years had led to the creation of “a lot more layers” within the organisation, which in turn slowed down decision-making. He said that with the ongoing AI transformation reshaping industries, agility is more important than ever.

“Sometimes, without realising it, you can weaken the ownership of the people that you have who are doing the actual work,” Jassy said, according to Business Insider, adding, “And it can lead to slowing you down.”

Jassy's comments highlight a trend spreading across Big Tech. Companies like Google and Microsoft have also been flattening their organisational structures, reducing management layers to accelerate operations and eliminate corporate excess.

In the latest round of job cuts on Oct. 28, Amazon reportedly informed some affected employees of their termination through text messages. Many workers received two early-morning texts that day, notifying them their roles had been eliminated.

The first message advised staff to check their personal or work email accounts before leaving for the office, while a follow-up text instructed anyone who had not yet received an email about their employment status to contact the helpdesk for assistance.

The purpose of these text alerts, sent shortly after the emails, was reportedly to prevent affected employees from facing the awkward situation of arriving at work only to find their building access had been revoked.