Amazon says it didn’t cut 14,000 people because of money. It cut them because of ‘culture’

Media and tech analyst Mohit Rajhans says Amazon has not hidden how they want to use artificial intelligence to replace humans in the workforce.

New York — Amazon chief executive Andy Jassy’s explanation for why the company is cutting 14,000 employees? Not money. Not even AI, but “culture.”

The layoff announcement this week was “not really financially driven, and it’s not even really AI driven, not right now. It’s culture,” Jassy said in response to an analyst question on the company’s earnings call Thursday. Amazon’s quarterly sales grew 13 per cent year-on-year to US$180 billion.

Jassy explained that as Amazon added headcount, locations and lines of business in recent years, “you end up with a lot more people than what you had before, and you end up with a lot more layers … sometimes without realizing it, you can weaken the ownership of the people that you have who are doing the actual work.”

Amazon’s headcount peaked at more than 1.6 million in 2021; it ended last year with around 1.5 million employees, according to SEC filings.

“It can lead to slowing you down as a leadership team,” he said. “We are committed to operating like the world’s largest startup, and … that means removing layers.”

Although Amazon said this week that the layoffs were more about staying “nimble” in anticipation of future AI efficiencies, the layoffs have nonetheless spurred fears about technology replacing human workers. Amazon shares climbed 13 per cent after-hours following the earnings report.