Amazon announced on Tuesday that it will cut around 14,000 corporate positions as the company accelerates spending on artificial intelligence while reducing overall costs.

CEO Andy Jassy, who has pursued cost-cutting since taking the helm in 2021, had previously said generative AI could shrink Amazon’s corporate workforce over the coming years. He noted that more than 1,000 AI services and applications are already in progress or built, but that figure represents just a small portion of the company’s long-term plans.

Amazon is investing heavily in AI and cloud infrastructure, committing about $10 billion each to data center projects in Mississippi, Indiana, Ohio, and North Carolina. A $10 billion campus in North Carolina is also planned to expand its AI and cloud computing capabilities. The company is competing with other tech giants, including OpenAI, Google, and Microsoft, to meet rising demand for AI-powered products.

Beth Galetti, Senior Vice President of People Experience and Technology, said the job reductions are part of efforts to reduce bureaucracy and shift resources toward the company’s biggest strategic priorities. Affected employees will be notified Tuesday, given 90 days to seek internal positions, and provided severance pay, outplacement services, and continued health benefits if they cannot find new roles.

Amazon Cloud outage highlights internet’s hidden weak spots

Amazon employs about 350,000 corporate staff within a total workforce of 1.56 million. The cuts, roughly 4% of its corporate workforce, follow a major reduction of 27,000 jobs in 2023. Analysts said the layoffs are a strategic “cleaning” of Amazon’s corporate structure to focus on technological growth while maintaining profitability.

The company will release its quarterly financial results Thursday. Its cloud computing division, Amazon Web Services, reported 17.5% growth in the most recent quarter.

Source: AP