Amazon CEO Andy Jassy explained that the planned wave of layoffs, affecting around 14 thousand employees, has nothing to do with financial problems, nor with artificial intelligence, but rather with work culture.

At a conference for analysts held after the quarterly results announcement, Jassy said that these cuts are not 'financially motivated, nor driven by artificial intelligence, at least not at this stage, but by the company's culture'.

The company is growing, but also losing speed

In the third quarter, Amazon achieved sales growth of 13 percent compared to last year, reaching 180 billion dollars in revenue, writes CNN. Still, Jassy claims that rapid growth and business expansion can lead to the company becoming too layered and slow in decision-making. 'When over several years you increase the number of employees, open new headquarters, and add more lines of business, it is easy to end up with more layers and more people than necessary. This often, unconsciously, weakens the sense of responsibility among those doing the actual work,' he explained.

Returning to a 'start-up' mentality

At the end of last year, Amazon had around one and a half million employees, while their number peaked in 2021 at more than 1.6 million. Jassy emphasized that he wants the company to operate again like the 'world's largest startup', which, he says, implies removing unnecessary layers and returning to a faster, more efficient way of working. 'Too many layers can slow down the entire system, including management itself,' he added.

Layoffs sparked concern, shares jumped

Although Amazon stated that the layoffs are connected to preparations for future efficiency based on artificial intelligence, the news sparked concern among employees and the public because of the possibility that technology could replace human labor. Still, the market reacted optimistically, the price of Amazon shares rose 13 percent in trading after the results announcement, which analysts interpret as a sign of investor confidence in Jassy's restructuring strategy.