Amazon has released its financial results for the third quarter, revealing an exceptionally strong performance that exceeded most expectations, even amid a period marked by notable workforce reductions. During the three-month period ending on September 30, the e-commerce behemoth generated an extraordinary $180.2 billion in revenue. This figure represents a 13 percent increase compared with the same quarter of the previous year, underscoring the company’s continued resilience and its ability to maintain growth across multiple business segments despite economic uncertainties and internal restructuring. Particularly impressive was the performance of its cloud computing division, Amazon Web Services (AWS), which experienced its fastest annual revenue expansion since 2022. AWS posted a 20 percent rise, reaching roughly $33 billion in sales, signaling renewed vigor in one of Amazon’s most strategically significant areas. Following the earnings announcement, the company’s stock surged by approximately 13 percent in after-hours trading—an immediate indicator of investor confidence.
Yet, this financial triumph raises a perplexing question: why would a corporation performing at such a high level simultaneously choose to eliminate 14,000 corporate positions and even suggest that additional staff reductions might be on the horizon? The contrast between robust profitability and substantial layoffs has prompted widespread speculation about underlying motives and the company’s broader strategic direction. Fortunately, during Thursday evening’s earnings call, Amazon’s Chief Executive Officer, Andy Jassy, addressed the issue directly. When questioned about whether advancing artificial intelligence technology had played a role in the recent layoffs, Jassy was quick to reject such a linkage. He emphasized that the decision was not primarily driven by financial constraints or by the rapid integration of AI into the company’s operations—at least not at this stage. Instead, he attributed the move to deeper cultural considerations. In his words, the rationale behind the restructuring stemmed from the need to recalibrate Amazon’s organizational culture.
Expanding upon his explanation, Jassy noted that Amazon’s enormous growth over the past several years had naturally resulted in a proliferation of management layers and operational complexity. While such expansion allowed the company to dominate in new sectors, it also introduced bureaucratic inefficiencies, slowed decision-making processes, and diluted individual ownership and accountability, especially among employees on the front lines of project execution. In response to these challenges, Jassy articulated a renewed corporate commitment: Amazon aims to function once again with the agility and innovative spirit reminiscent of a startup, albeit on a global scale. This, he explained, is essential for navigating what he described as a profound technological transformation currently reshaping virtually every industry.
Earlier in the week, Amazon circulated an internal memorandum to the employees affected by the layoffs. The message reiterated much of Jassy’s reasoning but added an explicit acknowledgment of the transformative role of artificial intelligence. The memo, authored by Beth Galetti, Senior Vice President of People Experience and Technology, characterized the latest wave of AI innovations as the most consequential technological leap since the advent of the Internet. According to Galetti, the rapid pace of AI-driven advancement is compelling organizations worldwide to accelerate innovation, not only in existing markets but also across entirely new sectors. To remain competitive, Amazon believes it must maintain a leaner, flatter structure—one that empowers employees with greater ownership and enhances the company’s ability to act swiftly in service of its customers and business priorities.
Nevertheless, it is impossible to overlook the broader industry context. Across Silicon Valley, Amazon and its peers appear to be making massive bets on AI as the next major growth driver. Jassy noted during the same earnings call that the company’s AI and cloud infrastructure expanded by more than 3.8 gigawatts of power capacity in the past twelve months—a striking indication of the scale at which Amazon is deploying computational resources to support AI workloads. He further disclosed that an additional gigawatt of capacity is expected to come online in the fourth quarter alone, reflecting both confidence and urgency in meeting the soaring demand for AI services.
Reports also suggest that the workforce reductions may extend beyond administrative divisions. According to a recent New York Times report, Amazon’s automation division has projected that, by 2027, technological advancements—particularly robotics and artificial intelligence—could enable the company to forgo hiring more than 160,000 U.S.-based workers who would otherwise have been required to sustain its growth. Internal documents obtained by the same publication reveal an ambitious long-term objective: to automate roughly 75 percent of Amazon’s operational processes. If realized, this transformation would not only redefine the company’s organizational dynamics but could fundamentally reshape the landscape of global retail logistics. In sum, while Amazon’s immediate narrative centers on cultural renewal rather than technological displacement, the underlying reality points to a future in which human labor, organizational design, and artificial intelligence will be increasingly intertwined in shaping the company’s evolution.
Sourse: https://gizmodo.com/amazon-ceo-now-says-ai-is-not-responsible-for-recent-layoffs-2000679893
