Tech giant Amazon (AMZN) is leaning toward automation, signaling a major transformation in its corporate workforce. The company’s CEO, Andy Jassy, announced on Tuesday that the company anticipates a reduction in its corporate headcount in the coming years as it increasingly integrates generative AI tools and virtual agents into its operations. In an internal note, Jassy has encouraged employees to adopt AI tools and explore how to “get more done with scrappier teams.”
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Humans Out, AI In
As AI becomes increasingly capable of managing repetitive office tasks, Amazon is steadily shifting away from human labor for routine work. Jassy stated that while the long-term outcome is uncertain, the company anticipates a decline in its overall corporate headcount over the next few years.
Notably, Amazon’s workforce included over 1.5 million full-time and part-time employees by the end of last year. In addition, it relies on temporary warehouse workers and contractors to support operations.
The announcement follows a series of job cuts at Amazon, which has laid off over 27,000 employees since 2022. This year alone, the company cut around 200 roles in its North America Stores unit in January and another 100 in its Devices and Services division in May.
Amazon’s Automation
Amazon has made major investments in AI, launching proprietary tools and rapidly expanding its data center footprint to meet growing demand. Additionally, the company is leveraging AI to enhance inventory management, boost forecasting accuracy across its fulfillment network, refine its customer service chatbot, and upgrade product detail pages.
According to D.A. Davidson five-star-rated analyst Gil Luria, Amazon is echoing a growing sentiment across the tech industry. Meanwhile, AI is advancing so rapidly in driving efficiency that it’s gradually reducing the need for new hires. He added that the biggest impact is currently seen in software development roles, which is where hiring has slowed the most.
Is AMZN Stock a Buy?
According to TipRanks, AMZN stock has a Strong Buy consensus rating based on 46 Buys and one Hold assigned in the last three months. At $241.64, the Amazon average share price target implies an upside of 12.5% from the current level.
