- Amazon (NASDAQ:AMZN) stock dipped after the company announced 16,000 new layoffs, its second major cut in three months, as it restructures to compete in the accelerating AI arms race
- The company is rapidly expanding its AI and robotics footprint, including deploying over 1 million robots and launching new internal systems like Blue Jay and Project Eluna to boost employee productivity and safety.
- Despite workforce reductions, Wall Street remains bullish: Bank of America named Amazon its top mega‑cap pick for 2026, citing AWS growth, AI leadership ambitions, and rising adoption of Amazon’s Trainium AI chips
- Amazon (NASDAQ:AMZN) stock opened trading at US$243.00
Amazon (NASDAQ:AMZN) shares edged lower Wednesday into Thursday after the tech giant announced it is laying off 16,000 employees, its second major workforce reduction in three months, as the company restructures itself to compete more aggressively in the accelerating race for AI dominance.
The cuts were detailed in a blog post from Beth Galetti, senior vice president of People Experience and Technology, who said Amazon must strip away operational “red tape” to boost its decision-making speed. The announcement follows October’s move to cut 14,000 corporate employees under CEO Andy Jassy’s push to operate like “the world’s biggest startup”—leaner, faster, and more adaptive.
With more than 350,000 corporate employees in 2024, according to filings with the US Equal Employment Opportunity Commission, the two layoff rounds represent roughly 9 per cent of Amazon’s office workforce.
AI at the core of Amazon’s transformation
The layoffs come as Amazon aggressively expands its artificial intelligence footprint through new deals, advanced internal systems, and large-scale automation projects.
In October, the company said Amazon Robotics, founded in 2012, had surpassed a major milestone: more than 1 million robots deployed across its global network. The systems range from warehouse robotics to automated guided vehicles that assist with fulfillment, sorting, and logistics.
Amazon says these AI-driven technologies are designed not just for efficiency, but to make “workdays safer, easier, and more productive while delivering packages to customers faster than ever.”
To further that goal, the company recently introduced two internal AI-powered platforms:
- Blue Jay, aimed at reducing physically demanding tasks and assisting with repetitive motion work.
- Project Eluna, built to simplify decision-making and help employees transition into higher‑skill roles.
Together, these initiatives are intended to “open new career opportunities for the employees who keep Amazon moving,” the company said.
Layoffs begin as internal email leaks early
The job reductions began Wednesday. Employees were alerted Tuesday night in an internal email that was mistakenly sent ahead of schedule. The memo referenced Wednesday’s blog post before it had been made public.
Most affected employees will receive 90 days to apply for internal openings. Those who cannot secure new roles will receive severance packages and additional benefits.
The company also confirmed it will shut down its Amazon Fresh and Amazon Go grocery operations, shifting its strategy toward its Whole Foods brand.
Wall Street still bullish on Amazon’s AI trajectory
Despite Wednesday’s stock dip, Amazon shares remain up more than 4 per cent year to date, and analysts see 2026 as a potentially strong year for the US$2.56 trillion tech giant.
Bank of America recently named Amazon its top mega-cap pick, citing:
- expected profit expansion
- new AI partnerships
- accelerating AWS growth
- rising adoption of Amazon’s in-house Trainium AI chips
BofA analysts said leadership changes within AWS could “drive change in AWS’s AI positioning,” including rapid usage growth of Rufus, Amazon’s AI shopping assistant, which they believe could help enable an “agentic retail future.”
Trainium adoption is another strategic pillar. If the chip family continues improving against competitors, analysts say AWS could gain a cost-efficiency advantage as enterprises seek to lower spending on AI inference workloads, which are notoriously expensive to run at scale.
AI’s disruption: Still early, but accelerating
Jassy has openly discussed how AI will reshape Amazon’s workforce. Last year, he said that efficiency gains from AI would reduce headcount over time, a trend he expects across nearly every industry. He projected that “billions of AI agents” will eventually be deployed across businesses.
The broader job market is already shifting. Positions most exposed to AI automation are growing faster than they did before the pandemic—and faster than most other kinds of jobs. Still, companies are increasingly reporting that AI tools can replace certain entry-level or administrative functions.
For now, economists say there is no evidence of widespread AI-driven displacement, but the pace of technological adoption continues to raise questions about long-term impacts.
Reuters previously reported Amazon was considering cutting around 30,000 white-collar roles, or roughly 10 per cent of its corporate workforce—a figure that aligns with the scale of layoffs now announced.
Amazon has scheduled its next fiscal quarterly earnings call (for Q4 2025) for next Thursday, February 5th, 2026.
Out for delivery
Amazon is the e-commerce and technology giant behind Prime, Amazon Web Services, Kindle, Amazon Echo and Alexa, Fire tablets and Amazon Studios. It strives to be Earth’s most customer-centric company, Earth’s best employer and Earth’s safest place to work.
Amazon stock (NASDAQ:AMZN) closed Wednesday trading down 0.70 of a per cent and continued to lose 0.40 of a per cent at Thursday’s open, at US$243.00, but has risen just over 2 per cent since this time last year.
Join the discussion: Find out what everybody’s saying on the Amazon.com Inc. Bullboard, and check out the rest of Stockhouse’s stock forums and message boards.
Stockhouse does not provide investment advice or recommendations. All investment decisions should be made based on your own research and consultation with a registered investment professional. The issuer is solely responsible for the accuracy of the information contained herein. For full disclaimer information, please click here.
