Amazon, the e-commerce giant that rapidly expanded its workforce during the pandemic, is now openly acknowledging that its extensive adoption of Artificial Intelligence (AI) will lead to a reduction in its corporate headcount in the coming years.
AI reckoning
Amazon CEO Andy Jassy, in a recent message to employees, said, “fewer people doing some of the jobs that are being done today.”
Jassy added that they will need more people to fill other roles.
“It’s hard to know exactly where this nets out over time, but in the next few years, we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company”, Jassy said.
The CEO also asked employees to learn and experiment with using AI tools and figure out how to do more with scrappier teams.
This frank assessment underscores a significant shift in how one of the world’s largest employers views its future workforce.
Change after rapid workforce hiring
This change in mandate comes even after Amazon had let go of more than 27,000 workers since 2022.
It had also laid off 200 employees in the North America stores unit in January and 100 workers in the devices and services unit.
Amazon’s workforce swelled considerably, reaching a peak of over 1.6 million full-time and part-time employees by the end of 2021.
This rapid growth was a direct response to the unprecedented surge in online demand driven by global lockdowns.
As of March 2025, Amazon had 1.56 million workers in its global workforce. This includes full-time and part-time workers.
Apart from this, Amazon also hires temporary workers and contractors for warehouses.
Now, the narrative is shifting from “right-sizing” to efficiency gains driven by AI.
Jassy emphasized that Generative AI is a “once-in-a-lifetime” technology that is “completely changing what’s possible for customers and businesses.”
Amazon’s pervasive use of AI spans across numerous operations, significantly enhancing efficiency and customer experience.
In its vast fulfillment network, AI is crucial for optimizing inventory placement, refining demand forecasting, and improving the efficiency of its ubiquitous robots.
This directly translates to reduced “cost to serve” and faster delivery speeds.
Amazon is the latest company to use AI to transform its workforce.
In April, the Shopify CEO, Tobi Lutke, said the employees will be asked to prove why they cannot do the work they want with AI before asking for more resources and people.
Klarna CEO Sebastian Siemiatkowski in May said the company has reduced its workforce by 40% due to AI investments and natural workforce attrition.
Amazon in February said it will invest $100 billion in capital expenditure, increasing from last year’s $83 billion.
The company has been investing in data centers, networking gear, and hardware to meet the demand for generative AI.
The vast majority of capex is invested in AWS.
Amazon was also reportedly planning to issue its stablecoins.
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