Global retailer Amazon has laid off 14,000 corporate employees and may eventually cut as many as 30,000 in the near future.
If the cuts eventually reach 30,000, they would represent nearly 10 percent of Amazon’s 350,000 global corporate employees, according to Reuters.
In the first round of 7,500 cuts, the majority of impacted positions were in Amazon’s retail sector, spanning e-commerce, logistics, and human resources, per Business Insider.
Amazon Senior Vice President of People Experience and Technology Beth Galetti largely attributed the layoffs to the rise in artificial intelligence (AI) technology.
“Some may ask why we’re reducing roles when the company is performing well. Across our businesses, we're delivering great customer experiences every day, innovating at a rapid rate, and producing strong business results,” Galetti said in a memo. "What we need to remember is that the world is changing quickly. 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 in existing market segments and altogether new ones. We’re convinced that we need to be organized more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business.”
In addition to the layoffs, Amazon is closing physical grocery stores. The company recently announced it would close four stores in California along with one in Plainview, New York, U.S.A., per Retail Dive. The company is also closing 14 Amazon Fresh stores in the U.K. and will convert five of the stores to Whole Foods Market locations.
The Amazon layoffs and store closures follow similar moves made from other retailers.
Target recently announced it was slashing 1,800 corporate jobs, with incoming CEO Michael Fiddelke saying that the cuts are difficult but “a necessary step in building the future of Target and enabling the progress and growth we all want to see.”
“The truth is, the complexity we’ve created over time has been holding us back. Too many layers and overlapping work have slowed decisions, making it harder to bring ideas to life,” he said.
Similarly, U.S. retailer Kroger announced in late August it would lay off around 1,000 corporate employees, which itself followed an announcement in July that the operator of nearly 2,800 grocery stores planned to close around 60 stores over the next 18 months.
As a knock-on effect of the cuts like the ones Amazon, Target, and Kroger have recently made, U.S. consumer confidence hit a six-month low in October amid worries about the availability of jobs in the near term, Reuters reported.
A survey from nonprofit think tank The Conference Board found that confidence declined among consumers making an annual income of less than USD 75,000 (EUR 65,000), but consumers earning more than USD 200,000 (EUR 173,000) a year are more upbeat – these high-income households are keeping the economy afloat through robust consumer spending, it reported.
Lower-income households, meanwhile, are struggling to make ends meet amid higher prices, including from U.S. President Donald Trump's tariffs on imports, according to Reuters.
