Amazon.com Inc. (AMZN) made it official Wednesday: about 16,000 people are losing their jobs as the tech giant continues reshaping its corporate structure.
Beth Galetti, Amazon's Senior Vice President of People Experience and Technology, broke the news to employees Tuesday. The cuts are part of organizational changes that kicked off back in October. "We've been working to strengthen our organization by reducing layers, increasing ownership, and removing bureaucracy," Galetti explained in her message.
Here's how it works for those affected: Most U.S. employees get 90 days to hunt for new roles internally, though the timeline varies internationally based on local labor laws. If they can't land something else at Amazon, they'll walk away with severance pay, outplacement services, and health insurance benefits.
The Second Round
This isn't Amazon's first rodeo with layoffs lately. The company already announced 14,000 corporate job cuts back in October. Add these together and you're looking at roughly 30,000 positions on the chopping block. That sounds massive, but it's actually about 1% of Amazon's total workforce of 1.56 million people.
The cuts are hitting multiple divisions: Amazon Web Services, retail operations, Prime Video, and the People Experience and Technology unit.
CEO Andy Jassy had an interesting take when discussing these cuts during the company's third-quarter earnings call. He insisted they were "not really financially driven, and it's not even really AI driven," emphasizing instead that they were about "culture."
What The Street Thinks
Not everyone's buying the official explanation. CNBC's Jim Cramer came out with a "Buy" rating for Amazon on Tuesday, backing the company's efficiency push. Wall Street analysts generally agree, maintaining a consensus price target of $293.82, which suggests about 19% upside from current levels.
But Gene Munster, managing partner at Deepwater Asset Management, offered a more cynical view. He suggested that AI's role in workforce reductions might be "an unspeakable factor that executives find difficult to acknowledge publicly." In other words, maybe the robots are taking jobs, but nobody wants to say it out loud.
Price Action: AMZN stock traded up 0.40% in Wednesday's pre-market session.
