'Largest downsizing in history': Why is Amazon set to lay off 30,000 people?

With the festive season approaching in the West, Amazon has delivered a jarring surprise. The tech giant is reportedly gearing up for what could be the largest round of layoffs in its history, with tens of thousands of employees expected to lose their jobs.

According to Reuters, the company plans to cut up to 30,000 corporate roles across almost all departments, accounting for nearly 10 per cent of its white-collar workforce.

As per CNBC, affected employees will start receiving email notifications beginning Tuesday morning. Amazon has, however, declined to comment on the reports.

The move has sparked widespread concern among employees and industry watchers, raising questions about what’s behind such a massive downsizing at one of the world’s most reputed tech companies.

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So, why is Amazon cutting so many jobs, and which divisions are expected to take the biggest hit? Here’s what we know so far.

Amazon layoffs: Which departments will be affected?

The latest round of layoffs at Amazon is expected to impact a wide range of divisions, from human resources (known internally as People Experience and Technology or PXT) to operations, Amazon Web Services (AWS), and devices and services, Reuters reported.

Managers in the affected departments were reportedly asked to attend a training session on Monday on how to communicate with employees following the layoffs. The email notifications informing staff of their job status are expected to start rolling out from Tuesday.

Amazon, which is the second-largest private employer in the US, has a global workforce of around 1.54 million people. While most of these employees work in warehouses, about 350,000 hold corporate positions, the category most affected by these job cuts.

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Over the past two years, Amazon has carried out multiple rounds of layoffs, slashing roles across departments such as communications, devices, and podcasting. Between late 2022 and 2023, CEO Andy Jassy oversaw the company’s largest-ever layoffs, which cut around 27,000 corporate jobs, nearly 8 per cent of its office staff at the time.

Tech giants on a layoff spree

Amazon isn’t the only tech giant tightening its belt this year. Across the industry, over 200 tech companies have collectively laid off nearly 98,000 workers in 2024, according to data from Layoffs.fyi.

Microsoft has reportedly cut around 15,000 jobs so far, while Meta recently laid off about 600 employees from its artificial intelligence division. Google also reduced its headcount earlier this month, slashing over 100 design-related roles within its cloud unit.

Meanwhile, Intel implemented the most significant downsizing among major firms this year, eliminating an estimated 22,000 jobs, data showed.

While last year also saw widespread layoffs, 2023 still remains the toughest year for the tech sector, with close to 1,200 companies cutting over 260,000 jobs amid rising inflation and soaring interest rates.

Also read: Will 2025 be another year of layoffs?

Why are the big techs downsizing?

There isn’t one single reason behind the wave of layoffs sweeping through the tech industry, it’s the result of a mix of strategic, economic, and structural shifts.

Over the past few years, major tech firms hired aggressively during the pandemic, expecting digital demand to stay at record highs. But as the world returned to normal, growth slowed, leaving many companies overstaffed and facing pressure on their profit margins. With operations bloated, several firms began trimming roles that no longer aligned with current business needs.

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At the same time, companies are redirecting their focus and funds toward artificial intelligence, automation, and high-growth sectors like cloud computing and data infrastructure. This transition has made many legacy and support functions redundant.

Amazon CEO Jassy acknowledged this in a June memo to staff, saying that the company’s embrace of generative AI would likely lead to a smaller workforce.

“We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs,” Jassy said. “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.”

Beyond AI shifts, rising interest rates, inflation, and supply chain disruptions, have forced companies to cut costs and optimise operations. Many are merging teams, streamlining decision-making, and flattening hierarchies to improve efficiency and agility.

Jassy has also pushed to simplify Amazon’s corporate structure, saying the company aims to “remove layers and flatten organisations.”

Despite the job cuts, the tech firm is reportedly gearing up for the holiday season with a hiring spree of 250,000 seasonal workers, matching the figure from the previous two years, to support warehouse and delivery operations.

With input from agencies