Amazon (AMZN) CEO Andy Jassy said the company will cut its workforce in the coming years, and Microsoft (MSFT) reportedly plans thousands of layoffs to ensure the two companies invest in billions of artificial intelligence efforts.
Microsoft is scheduled to announce a cut that it aims primarily to serve as a sales team early next month, according to Bloomberg, which cited an anonymous source.
Microsoft declined to confirm layoffs to Yahoo Finance. “As they usually do all year round, teams assess business priorities and ensure they are in line with the right opportunities for strategic growth,” the spokesperson said.
The news comes after Amazon's Jassy said on Tuesday that AI would lead to job openings for his own company.
“As we deploy more generative AI and agents, we need to change the way we work. There are fewer people doing some of the work that is being done today, and more people doing other kinds of jobs,” Jassy said in a note to employees.
“It will be difficult to know exactly where this is online over time, but over the next few years, this is expected to reduce the total workforce of businesses.
Jassy said Amazon “uses a wide range of generated AI across internal operations” for tasks such as inventory management and demand forecasting in its delivery system.
For AI, the CEO would “will be able to focus more on thinking strategically about how to improve the customer experience and invent something new.” Comments were filled with backlash from employees.
Several Amazon's corporate employees are facing orders to get closer to managers and teams, Bloomberg reported Thursday. The order would require many of them to move across the US to Seattle, Washington, DC and other hubs, the source said.
Meanwhile, Amazon and Microsoft are spending billions on moving forward with their AI efforts. Over the past few years, Amazon has consistently reported higher capital expenditures than its fellow big-tech “hyperschool” investments driven by AI infrastructure investments. That trend is expected to continue in 2025.
Amazon expects to spend $100 billion, which is much higher than its peers, with the majority going to the AI infrastructure of Amazon Web Services, a crowdsegment. Microsoft plans to spend $80 billion in 2025 to build an AI data center.
Amazon and Microsoft have announced layoffs in recent years. Microsoft fired 3% of its workforce in May after a bright revenue report. Amazon has significantly reduced more than 27,000 jobs between 2022 and 2023. This is just as Jassy was promoting AI efforts. The company fired another 100 workers in May amid a CEO's aggressive efforts to cut back on middle managers while trying to run Amazon like the “world's biggest startup.”
