In his first public comments on Amazon’s latest round of mass layoffs, CEO Andy Jassy offered a surprising justification for cutting 14,000 jobs.
The decision was not driven by financial pressures or the rise of AI, but by a deliberate effort to reshape the company’s “internal culture”, Jassy said.
The explanation, delivered during the company’s quarterly earnings call, appears to diverge from the initial reasoning provided by his own executive team and reframes the massive job cuts as a key part of Jassy’s broader mission to make the tech giant leaner and more disciplined.
A contradiction at the top? Culture vs. AI
Jassy was unequivocal in his reasoning, stating that the move was about organisational structure rather than immediate financial or technological imperatives.
“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,” Jassy said.
It really — it’s culture.
However, that explanation appears to stand in contrast to the message delivered just two days earlier by Beth Galetti, Amazon’s senior vice president of people experience and technology.
In a blog post announcing the layoffs, Galetti explicitly linked the cuts to the rapid changes brought by artificial intelligence.
“This generation of AI is the most transformative technology we’ve seen since the Internet, and it’s enabling companies to innovate much faster than ever before,” she wrote.
Jassy’s push to eliminate ‘layers’ and ‘corporate bloat’
Elaborating on his “culture” argument, Jassy explained that Amazon’s rapid expansion in recent years had created excessive bureaucracy that was hindering the company’s ability to innovate.
“Sometimes, without realizing it, you can weaken the ownership of the people that you have who are doing the actual work,” Jassy added. “And it can lead to slowing you down.”
He emphasized that removing these “layers” was critical at a time when the AI transformation demands that the company operate with greater speed and agility.
Amazon is not alone in this push.
The move is part of a wider trend in the tech industry, sometimes called the “Great Flattening,” which has seen rivals like Google and Microsoft also trim layers of management to shed corporate bloat and accelerate decision-making.
The financial and human cost of the reshuffle
The move, which is Amazon’s largest single job cut since it shed 27,000 positions in late 2022, comes with a significant price tag.
The company revealed that it expects to incur an estimated $1.8 billion in severance costs related to the layoffs.
Jassy’s comments signal that his efforts to raise performance standards and enforce discipline, as chronicled by Business Insider, are now a central pillar of the company’s strategy, with major implications for its global workforce.
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