Amazon Cuts 16,000 Jobs to Fund AI Push

Key Points

• Amazon officially eliminated 16,000 corporate positions on January 28, 2026, marking the second major workforce reduction in three months
• Total layoffs reach 30,000 since October 2025, representing the largest workforce cut in company history
• AI infrastructure spending takes priority, with Amazon projecting $125 billion in capital expenditures for 2026
• Affected divisions include Amazon Web Services, Prime Video, retail operations, and human resources departments
• Employees get 90-day window to find internal roles, with severance packages for those unable to secure new positions

Background

Amazon’s workforce ballooned during the pandemic as online shopping surged and millions stayed home. The company’s headcount roughly doubled between 2019 and 2024, creating what CEO Andy Jassy now describes as excessive bureaucratic layers.

This latest reduction follows October 2025’s elimination of 14,000 corporate roles. At that time, Beth Galetti, Amazon’s senior vice president of people experience and technology, warned that additional cuts could continue into 2026 as leadership identified areas to streamline operations (ℹ️ OPB).

What Happened

On Wednesday morning, January 28, 2026, Amazon confirmed the job eliminations through an internal memo from Galetti. The announcement stated the company was “reducing layers, increasing ownership, and removing bureaucracy” across its corporate structure (ℹ️ Al Jazeera).

The news didn’t come as a complete surprise. Reuters had reported the impending layoffs the previous week, and an email mishap on Tuesday accidentally alerted some Amazon Web Services employees early. The premature message, signed by AWS senior vice president Colleen Aubrey, referenced the cuts as “Project Dawn” and incorrectly stated that affected employees had already been notified (ℹ️ Yahoo Finance).

U.S.-based employees receive 90 days to search for new internal positions. Those unsuccessful or choosing not to pursue new roles will receive severance pay, outplacement services, and health insurance benefits.

Why It Matters

These workforce reductions signal a fundamental shift in how tech giants allocate resources. While Amazon officially cites bureaucracy reduction as the primary driver, the timing coincides with massive AI infrastructure investments.

Amazon expects capital expenditures to reach $125 billion for 2026—the highest spending forecast among major technology companies. Most of this investment targets new data centers and advanced computing chips needed for AI capabilities (ℹ️ CNBC).

CEO Andy Jassy acknowledged last summer that AI efficiency gains would likely shrink the corporate workforce. However, he later clarified that layoffs weren’t directly AI-driven but rather aimed at eliminating the “pre-meeting for the pre-meeting for the meeting” culture that developed during rapid expansion (ℹ️ OPB).

Some Amazon employees report increasing pressure to use AI tools to compensate for reduced team sizes, though company spokespeople deny that AI usage factors into performance evaluations.

What’s Next

Galetti attempted to reassure remaining employees that mass layoffs wouldn’t become routine, stating, “That’s not our plan.” However, she left the door open for future adjustments, noting that teams will continue evaluating their “capacity to invent for customers.” (ℹ️ CBS News)

The cuts come alongside another major restructuring: Amazon announced Tuesday it would close all Amazon Go and Amazon Fresh stores to focus grocery operations under the Whole Foods umbrella.

Amazon’s hometown of Seattle feels the impact most acutely. Tech layoffs have pushed the metro area’s unemployment rate to 5.1%—well above the national average. Business analysts expect more technology sector job cuts throughout 2026 as companies prioritize AI infrastructure spending over headcount.

Deep Details

With roughly 1.57 million total employees globally, Amazon ranks as the second-largest private employer worldwide. However, most workers staff warehouses and fulfillment centers. The layoffs specifically target corporate offices, where approximately 350,000 employees work.

The combined 30,000 job cuts since October represent nearly 10% of Amazon’s corporate workforce—surpassing the company’s previous record of 27,000 layoffs between late 2022 and early 2023.

Industry observers note a broader pattern across major technology firms. Companies are redirecting resources from expensive skilled workers toward multi-billion dollar data center projects. As Andy Challenger of business coaching firm Challenger, Gray & Christmas observed, “There’s a lot of pressure on those companies to make cuts based on the investments that they’ve made.” (ℹ️ OPB)

Despite the workforce reductions, Amazon’s financial performance remains strong. The company reported nearly $21 billion in profits for its most recent quarter, with revenue exceeding $180 billion.

Source: Multiple sources including Reuters, Bloomberg, CNBC, Al Jazeera, OPB/KUOW, CBS News/AP — Published on January 28, 2026
Original reporting: Reuters, Bloomberg, CNBC