Amazon layoffs: Andy Jassy says cutting 14,000 jobs is about "culture," not AI or finances

[midian182]

Facepalm: Even in this age of constant layoffs, Amazon's decision to slash 14,000 jobs this week was a shock due to the sheer numbers involved. Now, CEO Andy Jassy has revealed the reason behind the cuts: it wasn't due to pandemic overhiring, AI, or financial reasons; it was because of "culture."

It was reported earlier this week that Amazon was to lay off up to 30,000 corporate staff. According to Reuters and The Wall Street Journal, the decision was designed to counter the massive overhiring spree Amazon undertook during the pandemic years.

The tech giant later confirmed that it would be reducing its corporate workforce by about 14,000 people, though more cuts are expected next year. It said at the time that artificial intelligence played a part in the decision. That wasn't unexpected, given that Jassy told employees in June that AI would mean fewer people being required for certain jobs.

But Jassy pointed to a different reason for the layoffs during Amazon's earnings call on Thursday. He said that the move was not really financially driven or even really AI driven. "It's culture," he explained.

Jassy has talked about addressing workforce culture at Amazon before, from reducing layers of management and bureaucracy to improving discipline and bringing remote workers back into the office. He introduced an anonymous complaint line for claims of inefficiencies that has seen 1,500 responses and more than 450 process changes.

Andy Jassy's definition of culture may differ from yours

Jassy said that as Amazon has grown and added more employees, locations, and business ventures over the 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."

CNN notes that Amazon's head count reached a high of 1.6 million in 2021. It ended last year with that figure at 1.5 million.

"It can lead to slowing you down as a leadership team," Jassy said. "We are committed to operating like the world's largest startup, and […] that means removing layers."

Unsurprisingly, plenty of people have questioned the wisdom of blaming the cuts on so-called culture. The company beat expectations in its third-quarter earnings report this week as revenue reached $180.17 billion, pushing its shares up 14%. The success is a bitter pill to swallow for those laid off, especially with Jassy talking about operating like a startup, removing layers, and being more efficient – saving more money, essentially.

Despite Jassy trying to move the blame away from AI, Amazon senior vice president of experience and technology, Beth Galetti, wrote in a post about the cuts that "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."

Amazon was already facing heat over reports that it aims to replace 600,000 US warehouse workers with robots. It then tried to claim that wasn't really the case while simultaneously revealing two new robots designed to replace humans.

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Amazon layoffs: Andy Jassy says cutting 14,000 jobs is about "culture," not AI or finances

 

[yRaz]

If AI and robotics are the panacea to the world's woes, then these businesses are going to find that there isn't anyone to buy their products anymore when noone has a job.

 

[godrilla]

If AI and robotics are the panacea to the world's woes, then these businesses are going to find that there isn't anyone to buy their products anymore when noone has a job.

As long as you dangle the free cheese on the mouse trap called UBI this will quell the public. Fingers crossed government shutdowns are not going to hold UBI and other welfare programs hostage.

 

[dirtyferret]

Nothing promotes culture like firing a bunch of people just before the holiday season.

 

[JamesBlond]

I asked Chat GPT if this was true, and Chat GPT said they have no need for people in the positions they lost jobs to as 1 GPT server performs the same tasks as 2000 people and without a salary, without need for food.
Here is my problem, if nobody has jobs, 100% sure they will starv, be un alive and only the rich will be left

 

[Thatsdisgusting]

Cancel culture, redefined.

 

[BogdanR]

But it is about culture, The Money Culture.
And no, you’re not invited.

 

[Watzupken]

This is how “record revenue/profit” is being derived nowadays. Sales are down, so cuts are to please big investors by keeping share prices ticking up.

 

[acrossthestars]

especially with Jassy talking about operating like a startup, removing layers, and being more efficient – saving more money, essentially.

But Amazon is NOT a startup. Built into the word "startup" is a whole host of implied inefficiencies, redundancies and stop-gap solutions. Those inefficiencies exist because startups are scrappy, fledgling operations by necessity. They can't afford bloat.

It's an insult to the idea of a "startup" and quite frankly, an assault on the English language, for the CEO of a multinational conglomerate to even pretend Amazon's cost-cutting measures are comparable to doing something drastic, like refinancing one's house, just to keep the lights on. Some positions may be redundant, but eventually you run out of runway. Because if people are the bloat that the company wants to eliminate, then there is no culture.