Revenue growth without employment growth? But Amazon spent $78 billion on capex in 2024 and more in 2025. So companies that get this cash hire more people than Amazon sheds?
By Wolf Richter for WOLF STREET.
Amazon announced in a blog post that it would reduce its global corporate workforce by 14,000 roles, “reducing in some areas and hiring in others,” it said, “to get even stronger by further reducing bureaucracy, removing layers, and shifting resources to ensure we’re investing in our biggest bets and what matters most to our customers’ current and future needs.”
It will offer most affected employees “90 days to look for a new role internally (the timing will vary some based on local laws), and our recruiting teams will prioritize internal candidates to help as many people as possible find new roles within Amazon,” it said.
But the net reduction would be 14,000 roles, or roughly 0.9% of its global headcount of 1.556 million full- and part-time employees as of December 31 (not counting contractors), or about 4% of its global corporate workforce of about 350,000.
Amazon is a global company with a global workforce, and it did not specify how many of these to-be-eliminated corporate roles are in the US, but it may have made reference to other locations with the phrase, “the timing will vary some based on local laws.”
Why? AI & Corporate Efficiency – amid strong demand.
AI: “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),” said the blog post, signed by Beth Galetti, Senior VP of People Experience and Technology.
Corporate efficiency: “We’re convicted [maybe AI-powered autocorrect hallucination for “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.”
Amazon had been a hiring machine: It had gone in five years from 341,000 employees at the end of 2016 to 1.608 million employees at the end of 2021. Over the two years of 2020 and 2021 alone, it had added 810,000 employees, more than doubling its headcount in just two years! This type of all-out hiring not only by Amazon but lots of other big companies was in part responsible for the “labor shortages” in that sector.
Since then, Amazon has announced a series of global work force reductions to undo some of the over-hiring, and it has made an all-out push to use AI and automation across the company to do more with fewer employees. So the headcount dropped in 2022 and again in 2023. But in 2024, Amazon once again increased its headcount and ended the year at 1.556 million. By December 2025, the headcount may have dipped again.
Revenue growth without employment growth?
At the headcount peak in 2021, Amazon booked $470 billion in revenues. By 2024, with 52,000 fewer employees, revenues had soared by 36% to $638 billion. That is the result of the corporate drive for efficiency – including automation and AI.
Amazon, after the over-hiring binge, is doing more with fewer employees through process improvements, automation, and AI. It could continue the net headcount reduction even as revenues increase at a substantial clip.
Amazon has been throwing tens of billions of dollars at capital expenditures every year: In 2023, $48 billion; and in 2024, $78 billion. It expects capex in 2025 to be higher still. These investments went “primarily” into technology infrastructure (AWS data centers and the like) and “additional capacity to support our fulfillment network,” according to its 10-K filing.
These billions of dollars of capex are revenues for other companies, such as construction companies that build AI data centers, companies selling data center equipment, server makers, chipmakers, companies manufacturing the robotic equipment at Amazon’s fulfillment centers, software providers, etc. etc.
The hope is that these other companies will hire more people in the US with the Amazon cash than Amazon lays off in the US. The hope is that it would all work out, sort of (though a laid-off Amazon corporate worker may not be the best fit for a construction company).
In the past, technological innovation has led to continued employment growth, but many people who lost their jobs to technological innovation had a hard time finding equivalent new jobs that they could do.
But that theory that AI will increase overall employment, based on past observations about technological innovation, has yet to be proven.
Every company is different and makes different decisions. Over-hiring during the pandemic by portions of corporate America, especially tech, led to serial layoffs starting in late 2022, amid AI implementation and improved automation.
Walmart last month said it wants to freeze overall employment at about 2.1 million for three years, but get more efficient, thereby cut costs, while pushing up revenues by incorporating AI tools and agents into nearly all its roles, with its white-collar jobs the first to be affected. It committed to train its employees in using AI tools and agents, and those who cannot make the shift will be replaced. “It’s very clear that AI is going to change literally every job,” CEO Doug McMillon said in an interview with the WSJ in September.
Last year, Intuit made similar headlines when it said that it would lay off approximately 1,800 employees in non-AI related roles (over 1,000 of those due to performance), while planning to hire at least that many new folks for AI-related roles, with essentially no change in employment.
A word about the rumors-based headlines yesterday evening…
Amazon’s 14,000 reduction of roles globally, and not necessarily in the US, dispels the clickbait headlines yesterday evening, all based on a Reuters article citing anonymous sources, “Exclusive: Amazon targets as many as 30,000 corporate job cuts, sources say,” which generated a flood of similar stuff across the internet, such as: “Amazon may lay off 30,000 employees this week,” or “Amazon to cut 30,000 corporate jobs in largest layoffs since,” or the WSJ headline, “Amazon to Lay Off Up to 30,000 Corporate Workers,” which the WSJ tuned down this morning after Amazon released the blog post, to “Amazon Lays Off 14,000 Corporate Workers.”
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Did you mean to insert a chart at “*** chart”? Thanks for the article!
The chart was late, got hung up in rush hour traffic because AI has taken over traffic lights. It made it now.
Looks like the tide has turned and companies are no longer nay-saying AI.
Once agents have real power to spend money (authorize returns, change reservations, adjust staffing), then AI use will take-off.
People can call Chase and there will be no options. They just say what they need and the bot says no or it says yes and takes care of it. Done.
FYI- you have a chart placeholder ***Chart.
I’m surprised that Wallyworld has a much higher employment than Amazone! The breadth of one with more limited human resources is amazing.
And all of the C-suite execs and shareholders can enjoy delicious hyperbubble profits, while workers lose their jobs and fall into abject poverty.
Of course the money saved by greater corporate efiicicency will be spent elsewhere thus creating jobs.
Improved efficiency has not led to mass poverty during the last 200 years of capitalism. That is unlikely to change now.
Although undoubtedly AI and automation has something to do with it, I suspect this move has more to do with Amazon overhiring during the pandemic (they went from a headcount of 800K in 2019 to 1.6M in 2021) and now they are trying to right-size the ship.
Note that they are not unique in this respect. Many other tech-focused companies also went through a massive hiring boom during the pandemic.
The “self-checkout” lane is even more insulting than any efficiency brought about by AI. Not only did the store get to fire someone, but now they are getting you to work for free…
No surprise Amazon the the grocery delivery apps are doing so well. It should be clear to everyone, with the shutdown in day 24, that the real corporate owners want everyone to work for free.
Self-check-out lanes have nothing to do with this. They’re just a shift of the cost of labor from the store to the customer. Baggers decades ago blazed the trail with this cost-shift to customers, who’ve been bagging their own stuff without demur ever since.
UPS in on the race:
“Meanwhile, UPS said in its third quarter earnings results on Tuesday that it had cut its “operational workforce by approximately 34,000 positions” in the first nine months of the year as it looked to be more efficient, while about 14,000 positions, primarily in management, had also been eliminated.”
Someday Amazon will go bankrupt and be sold for scrap the way A&P, Sears Roebuck, Kmart and many other once dominant retailers have been. They need to do everything possible to maximize efficiency and financial strength now to delay thier inevitable end. New technology only exists if it makes something faster, better or cheaper, and AI is for reducing costs and cutting expenses including people. Same with Walmart. It will be gone someday too when another company does it better.
“Someday” we will all be dead.
There seem to be more “hiring down” than “hiring up” headlines, due to AI, this year. Klarna has halved its headcount, due to AI, for example. The direction of travel for human recruitment is starting to feel negative, not positive.
CEOs at many companies follow the trend of what other execs do. Many CEOs have little idea of what different people do or what issues are being addressed. But the current CEO action is AI and employee cuts. These decisions are often the actions by leaders who read about current trends in exec magazines. And the media stories don’t clarify what is really happening or why.
CEOs are CEOs because they surround themselves with good people who have good teams who spend years working through these issues of efficiencies, step by step. CEOs of companies like Amazon don’t get to be CEOs of Amazon by “reading about current trends in exec magazines” 🤣
Amazon will eventually replace its warehouse workers with robots, considerably reducing even more of its workforce. All it will need are a few people to run the warehouses, people to deliver the goods (many of which are already contracted out), and a few nerds to manage everything.
Walmart has a lot of brick and mortar stores which need people to run them, e.g., cashiers, store-managers, and people to put stuff on shelves. Unlike Amazon, Walmart has to deal with retail theft.
Long term winner is Amazon, unless Walmart can get rid of its brick and mortar albatrosses. But then it would be just like Amazon.
People are cheap, robots are not. Robots break, and need more skilled technicians and engineers to repair/replace.
A car assembly line is one thing (same task a couple hundred thousand times per year). Using robots to address one-offs is inefficient.
Note I’m not saying they won’t push more automation, but we’re closer to the break even point of labor vs automation than most people think. So I’m not sure penetration will get that much deeper
Robots will be almost indestructible in a few years and much cheaper to make than now. I hope their software has a backdoor kill switch.
Robots are generally custom made for the application at hand. I had several in my plant in the 1980’s in manufacturing and as long as they performed their designed single task (not one that requires going from location to location and doing different things), they were fine. But I had a tech and an engineer in the wings of these machines. And, they ARE machines, and will continue to be machines.
If you look at a typical automotive assembly line , most robotic machines are used for spot welding, paint spraying and other very repetitive tasks. They are good for that, but require backup.
Amazon got slammed (by consumers) during Covid. They hired like crazy in response to that. I am comforted by your charts indicating they may have over hired. On the other hand, I’m pretty darned sure that one entry level employee using AI can EASILY do the work of at least 5 entry level employees. I’m pretty darned sure this is going on across the retail sector. We are going to know in the next 24 months.
It makes sense but also seems like AI is just used as a reason to eliminate talking to a real person in most circumstances. Honestly I actually prefer that but 90% of the time the AI can’t resolve an issue and finding your way to a human is really hard. Guessing AI will be the great downsizing excuse for the next 5 years, where in some cases it may be accurate, and in other simply a deflection.
Two things.
1) Shout this from the rooftops whenever a simpleton says technology creates more jobs than it destroys: “many people who lost their jobs to technological innovation had a hard time finding equivalent new jobs that they could do.”
2) AI agents will hit HR quite hard, and similarly affect other white collar roles whose principal work is managing information inside an organization. From a Harvard Business Review article about Hitachi automating HR with AI agents:
“An employee query to Skye triggers the agentic AI system, which sends the employee’s specific request to an intent classifier agent. Its job is to route the query to the appropriate AI agent.”
“For example, the intent classifier agent sends a simple policy question like “What are allowed expenses for traveling overseas?” or “Does this holiday count in paid time off?” to a file search and respond agent, which provides immediate answers by examining the right knowledge base given the employee’s position and organization. A document generation agent can create employee verification letters (which verify individuals’ employment status) in seconds, with an option for human approval. When an employee files a request for vacation, the leave management agent uses the appropriate HR management system based on its understanding of the user’s identity, completes the necessary forms, waits for the approval of the employee’s manager, and reports back to the employee.”
“Questions that require information outside of HR are also addressable by this agentic AI system. An employee looking to get IT approval for downloading a piece of software is routed to an IT help desk agent, which files a ticket in the correct IT service-management-software system, waits for the response, and then responds to the employee. A payroll question is managed by the payroll agent. The orchestration across these agents turns what was once a maze of systems into a seamless experience for employees.”
In both the situation of waiting for a manager’s approval for leave, and IT’s approval for a software download, AI can do the job itself. There is a decision tree of issues managers go through to determine if leave should be granted to a person on a date, as well as whether a piece of software is okay to download. AI can be trained on both and make the decisions immediately. This is why AI will crush white collar jobs.
Robots don’t need vacations or take sick leave or complain or have 401k’s or sex issues or harass other workers or get paid a wage. They need some minimal maintenance from time to time and software upgrades. If your job can be replaced by a robot, now or eventually, it is time to learn a new profession.
I think you’re overstating AI’s supposed benefits.
It would be nice if AI could get rid of the attorneys too.
Except technology does produce more jobs and it produces jobs that pay more and are less back breaking.
I wonder how in the larger context a growing economy without a growing workforce impacts everything. The prior assumptions were mostly that a growing economy meant growing employment and this consumer spending, payroll taxes, income taxes and so forth would keep pace. Feels like that ship has sailed.
Sounds like the 14,000 might just be the first wave.
From the internal Amazon communication that has been published in the news:
“ While this will include reducing in some areas and hiring in others, it will mean an overall reduction in our corporate workforce of approximately 14,000 roles…
…Looking ahead to 2026, as Andy talked about earlier this year, we expect to continue hiring in key strategic areas while also finding additional places we can remove layers, increase ownership, and realize efficiency gains…”
It’s that last sentence that keeps the door open for future rounds of layoffs…
This is a long-term project. They have been doing it, and they’re continuing to do it.
Southern California Edison will be starting layoffs after January 2026.
And it’s certainly not because electricity demand is down. I hope they’re letting their H-1b employees (that replaced American workers) go first.