Amazon's CEO says its 14,000 job cuts weren't driven by costs or AI: 'It's about culture'

This week, Amazon announced a significant reduction of 14,000 jobs, a move that CEO Andy Jassy indicated was not primarily about financial pressures or the rise of artificial intelligence. During the company’s quarterly earnings call, Jassy emphasized that the layoffs were fundamentally about aligning with Amazon's cultural values. "The decision we communicated recently was not financially motivated, nor is it driven by AI at this moment," Jassy explained, referring to the job cuts made public on Tuesday. He stressed that the focus is on fostering a culture that promotes accountability and efficiency. This reduction marks Amazon's most substantial workforce downsizing since it let go of 27,000 employees in late 2022. Jassy noted that the rapid expansion of the company in previous years has introduced numerous layers of management, which have hindered quick decision-making. He pointed out the necessity of streamlining operations during this critical period of transformation led by AI technology. Jassy warned that excessive layers can undermine the sense of ownership among employees, potentially slowing progress. He is not alone in this perspective; other tech giants like Google and Microsoft are also engaging in what is being referred to as the "Great Flattening," reducing managerial layers to enhance agility. Amazon's recent layoffs are estimated to incur about $1.8 billion in severance costs. The company previously framed these job cuts as a preemptive measure, highlighting that advancements in AI are facilitating faster innovation in the industry.