Why is Amazon laying off 16,000 employees worldwide?

New York: US giant Amazon announced on Wednesday it will cut 16,000 jobs worldwide as the company tries to streamline amid its major push into AI.

The job cuts, which follow already-flagged plans to trim its workforce by 14,000 posts, were aimed at "reducing layers, increasing ownership, and removing bureaucracy," senior vice president Beth Galetti said in a statement.

In October, reports emerged claiming that Amazon plans to cut roughly 30,000 jobs in total, which would comprise nearly 10 per cent of the 350,000 office jobs at the company. However, the move would not affect the distribution and warehouse workers who make up the bulk of the company's 1.5 million employees.

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Amazon did not give any breakdown of the latest cuts or specify which divisions would be affected, saying only that "every team will continue to evaluate the ownership, speed, and capacity to invent for customers, and make adjustments as appropriate."

The company will release its full-year 2025 results on February 5. In its last quarterly earnings statement in October, the company said it spent $1.8 billion on severance costs tied to planned job cuts.

Amazon said new positions will be offered to employees where possible.

The layoffs are in line with a trend in big tech to trim white-collar management jobs. Microsoft in July said it had slashed a little less than four percent of its global workforce, about 15,000 jobs.

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CEO Andy Jassy said in October, after the first round of layoffs, that the cuts were not related to budget or AI investments.

"Really, it's culture," he said, decrying too many layers of management.

Facebook owner Meta has also cut jobs over the past year, in a move intended to remove organisational bloat following aggressive hiring during the pandemic.

Dutch tech giant ASML on Wednesday said it would cut hundreds of management jobs to improve internal organisation, with HP and Oracle also announcing recent layoffs.

Like other tech giants, Amazon is making massive investments to grab a slice of the AI revolution pie.

It is particularly banking on the performance of its subsidiary Amazon Web Services (AWS), the world's leading cloud provider, which is engaged in a race against its fast-growing rivals, Microsoft Azure and Google Cloud.

Spending on developing new AI-based chips and services is growing exponentially. In December, Amazon announced it would invest more than $35 billion in India.