Amazon Announces Largest Layoffs In Company History, 27,000 Jobs Cut
Amazon.com Inc. announced plans to eliminate 27,000 jobs, the largest reduction since the company’s founding in 1994. The cuts, representing about 8% of Amazon’s global corporate workforce and roughly 5% of its total staff, will primarily affect white-collar roles across its consumer, cloud, and advertising divisions, with most impacted positions based in the United States. Many departures take effect immediately.
In a memo to employees, Chief Executive Andy Jassy described the decision as the toughest of his tenure and cited three converging pressures: a prolonged slowdown in online retail growth, tightening margins at Amazon Web Services (AWS), and the need to reallocate resources toward generative AI initiatives that demand a leaner cost structure.
Why Amazon Is Making Cuts Now
The reductions extend beyond earlier rounds. After trimming 18,000 jobs in early 2023 to recalibrate from the pandemic surge, Amazon will have cut more than 54,000 positions under Jassy with this latest move—signaling a deeper structural reset rather than a short-term adjustment.
Amazon’s core retail business has cooled. U.S. e-commerce sales rose just 3.1% year over year in the third quarter, the slowest pace since the 2008 financial crisis. Physical retail hasn’t filled the gap, with Whole Foods reporting a 1.4% decline in same-store sales as grocery inflation eased and households tightened budgets.
AWS, long the company’s profit engine, faces increasing price competition from Microsoft Azure and Google Cloud. While cloud spending remains resilient overall, customers are optimizing workloads more aggressively, pressuring revenue per customer. AWS’s operating margin slipped to 29.8% in the third quarter from 35.2% a year earlier, according to company filings.
At the same time, Amazon is accelerating its push into artificial intelligence. The company has earmarked $100 billion through 2028 for training large language models and deploying inference chips across its data centers. An internal initiative, Project Olympus, has already consumed $12 billion in capital spending this year. To fund these investments without diluting returns, leaders were instructed to streamline teams and prioritize roles that directly advance AI and automation.
Who Is Affected
The cuts target corporate and technical staff rather than hourly workers in fulfillment and delivery. An internal breakdown indicates:
- About 63% of the reductions are in the Seattle area, Amazon’s largest corporate hub.
- California will lose roughly 4,800 roles, primarily in Los Angeles and the Bay Area.
- The UK, Germany, and India will each see cuts in the low thousands, largely among overlapping back-office functions.
Fulfillment operations reportedly remain aligned with holiday demand plans, leaving hourly warehouse and delivery roles largely untouched.
Severance, Benefits, and Support
Laid-off employees will receive 20 weeks of base pay, plus one additional week for each year of service, capped at 40 weeks. Health coverage will continue through March 31, 2026. Amazon will provide outplacement support, and stock awards due to vest in February will accelerate for employees with at least one year of service.
The company also established a $100 million Second Act fund to match employee donations to charities aiding displaced tech workers. Labor groups welcomed the assistance but questioned its overall impact, noting that a typical mid-level manager’s package—about $180,000—may not counter a broader hiring slowdown in the Seattle tech market.
Market Reaction and Investor Outlook
Shares rose 2.4% in after-hours trading as investors endorsed the cost reset. Some analysts called the reductions overdue, boosted their rating to Outperform, and set a $230 price target, estimating the move could add approximately $3.8 billion to annual free cash flow by 2027.
On October 27, 2025, the stock gained roughly 1.2% to 1.6%, closing at $226.97, following reports that Amazon would begin cutting up to 30,000 corporate jobs starting October 28, 2025. The uptick reflected confidence in the company’s plan to address pandemic-era overhiring and streamline operations through AI and automation. Analysts remained optimistic about Amazon’s upcoming third-quarter earnings, expected October 30, 2025, citing AI initiatives and European expansion despite a 1.9% decline over the quarter.
Political and Industry Context
Elected officials in Washington state called the news a blow to working families. Some renewed support for policies targeting stock-based compensation. In Congress, leaders signaled plans to examine the human impact of AI-driven consolidation in the tech sector.
Across Silicon Valley, the retrenchment continues. Meta has cut 11,000 jobs, and Alphabet has shed 12,000 since January. Amazon’s move stands out for its scale and speed, with leadership emphasizing that operating with startup-like agility is now a requirement, not a slogan.
Human Impact
For many affected employees, the promise of AI-led growth feels distant. One senior product manager who relocated to Seattle at the company’s request 14 months ago said the layoff arrived via a morning calendar invite and that “customer obsession” now appears aimed at investors first.
The Road Ahead
Jassy framed the coming years as the most consequential decade in Amazon’s history. The decision to streamline is both a warning and a blueprint: to lead in artificial intelligence, even the strongest balance sheets must make room for the machines.
