Amazon’s Latest Workforce Restructuring
Amazon is preparing for another round of corporate layoffs, with sources indicating the company’s human resources division and core consumer business units will be particularly affected, according to a detailed report from IMD Controls. The People eXperience Technology team (PXT), Amazon’s internal name for its HR division, is expected to bear the brunt of these cuts, though the exact number of employees to be laid off and the precise timing remain unclear.
This development comes as Amazon continues its aggressive pivot toward artificial intelligence, with the company planning substantial investments in AI infrastructure while simultaneously seeking to reduce employee costs. The planned layoffs follow earlier workforce reductions this year in Amazon’s consumer devices unit, Wondery podcast division, and Amazon Web Services, though those cuts were relatively smaller in scale.
Inside Amazon’s HR Division
Amazon’s PXT division, which reports to Senior Vice President Beth Galetti, employs more than 10,000 people worldwide. The massive HR operation includes extensive recruiting teams, technology staff, and traditional human resources roles. Company spokesperson Kelly Nantel declined to comment on the specific layoff plans when approached by Fortune reporters.
The timing of these workforce reductions coincides with Amazon’s announcement that it will hire 250,000 seasonal employees across its U.S. warehouse and logistics networks for the holiday shopping season. This contrast between corporate cutbacks and operational hiring highlights Amazon’s shifting priorities as it navigates the changing retail and technology landscape.
AI Investment and Workforce Transformation
Amazon’s strategic direction is increasingly focused on artificial intelligence, with the company planning to spend over $100 billion in capital expenditures this year primarily on cloud and AI data center infrastructure. This massive investment reflects the company’s determination to compete in the rapidly evolving AI sector, where companies like Salesforce are also making significant strides with programs like Agentforce.
CEO Andy Jassy has been vocal about the company’s AI ambitions and their implications for the workforce. In a company-wide email published on Amazon’s corporate blog in June, Jassy encouraged employees to embrace AI technology, warning that “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.”
Jassy’s Cost-Cutting Legacy
Jassy, who succeeded Amazon founder Jeff Bezos as CEO in 2021, has developed a reputation for rigorous cost management. Under his leadership, Amazon conducted the largest layoffs in company history from late 2022 into 2023, eliminating at least 27,000 corporate positions representing a high single-digit percentage of the company’s office workforce.
The current economic environment has prompted many technology companies to reassess their staffing levels. As the creator economy faces its own challenges requiring fundamental fixes, and companies across sectors grapple with changing market conditions, workforce optimization has become a priority for many executives.
Internal Workforce Management Practices
Amazon executives regularly require managers to achieve specific targets for “unregretted attrition” (URA) – a percentage of employees the company is willing to lose through voluntary departures, performance-based exits, or formal layoffs. However, sources indicate that the current round of cuts is being discussed differently internally than the typical URA process, suggesting these may be more strategic than routine workforce adjustments.
The technology sector’s workforce transformation comes amid broader industry shifts, including increased competition in emerging technology categories. Companies like Samsung are preparing to challenge established players with new extended reality hardware, while businesses across sectors are adapting to new economic realities, including the potential impacts of ongoing government budgetary challenges.
Market Context and Financial Performance
Amazon’s stock performance reflects the complex environment facing technology companies. While the company’s share price is down slightly more than 1% for the calendar year, it remains 15% higher than it was twelve months earlier. Amazon is scheduled to report earnings later this month, which may provide additional context for these workforce decisions.
The planned layoffs represent the latest chapter in the ongoing transformation of the technology workforce, as companies increasingly look to artificial intelligence to handle routine tasks while focusing human talent on more complex, strategic work. As Jassy noted in his June communication, “We expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company.”
This approach reflects a broader industry trend where technology companies are balancing substantial AI investments with workforce optimization, creating both challenges and opportunities for employees navigating this rapidly changing landscape.
