Amazon’s 14,000-person layoffs earlier this week weren’t necessarily driven by financial or AI factors, CEO Andy Jassy said during the company’s earnings call on Thursday. Instead, the primary motivation behind cutting the workforce was “culture,” he explained.
“The announcement that we made a few days ago was not really financially driven, and it’s not even really AI-driven, not right now. It’s culture,” he told analysts on the call, explaining that as Amazon grew dramatically over the last few years, the company added more “layers” that became cumbersome to its decision-making process.
“When that happens, sometimes without realizing it, you can weaken the ownership of the people that you have who are doing the actual work and who own most of the two-way door decisions, the ones that should be made quickly and right at the front line, and it can lead to slowing you down,” he said.
Jassy continued: “As a leadership team, we are committed to operating like the world’s largest startup, and that means removing layers, it means increasing the amount of ownership that people have and it means inventing and moving quickly. I don’t know if there’s ever been a time in the history of Amazon, or maybe business in general, with the technology transformation happening right now where it’s important to be lean, important to be flat, it’s important to move fast, and that’s what we’re going to do.”
When Amazon cut 14,000 people on Tuesday, Beth Galetti, senior vice president of people experience and technology, cited the need to be nimble in the AI era in a note to staff.
“What we need to remember is that the world is changing quickly,” she wrote. “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). 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 may not be over yet, although Jassy did not indicate more to come on Thursday’s earnings call. The company has plans to replace more than half a million jobs with robots in the coming years, believing it can leverage new technology to avoid filling hundreds of thousands of roles, according to the New York Times.
