Dive Brief:

• Amazon laid off 14,000 corporate workers as part of a reorganization effort, according to a Tuesday announcement. The company, which will report Q3 2025 earnings Thursday, did not immediately disclose which specific units were affected. 

• “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,” said Beth Galetti, Amazon's SVP of people experience and technology, in a blog post. “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.”

• The layoffs come nearly a year after Amazon CEO Andy Jassy directed the business to reduce management layers in a move for more agility. Jassy pushed the business to increase the ratio of individual contributors to managers, and sent workers back to the office most days.

Dive Insight:

The Tuesday wave of cuts are the largest at Amazon since 2023, when the company laid off more than 18,000 workers amid a broader tech industry restructuring. The rationale then centered around economic uncertainty and previous hiring surges, especially during the COVID-19 pandemic.

Now, the latest round of cuts focuses on market shifts fueled by AI's rapid development — a race that AWS, Amazon's cloud unit, has helped stoke.

The company said in February it planned to spend more than $100 billion this year in capital expenditures, mainly to expand compute capacity for AWS amid rapid adoption of its AI services. 

“When AWS is expanding its CapEx, particularly on what we think is one of these once-in-a-lifetime type of business opportunities like AI represents, I think it’s actually quite a good sign, medium- to long-term, for the AWS business,” Jassy said during the company's Q1 earnings call. 

AWS is not alone in its push to expand compute capacity. Microsoft and Google said they'd spend $80 billion and $85 billion, respectively, to accommodate soaring demand for enterprise-grade compute. 

In the race to attract AI-optimized infrastructure spend — which Gartner estimates will top $37 billion next year — Amazon's cloud unit has retained its long-held leadership position in cloud market share of around one-third, according to Synergy Research Group. 

But competition is heating up, and AWS's two closest rivals are growing their share of the segment, SRG found. Microsoft attracted 20% of cloud spend during the second quarter of this year while Google held 13% of spending.  

Layoffs at AWS come just over a week after the cloud provider dealt with an hourslong meltdown in its US-East-1 Region. The outage roiled multiple applications simultaneously, putting business continuity plans to the test.