Just as news outlets shared leaked Amazon documents suggesting the company could replace half a million warehouse jobs with robots, the e-commerce giant pulled the rug out and laid off 14,000 middle managers instead.
TL;DR
- Amazon laid off 14,000 middle managers, not warehouse workers, as part of a strategic realignment.
- This move suggests AI may impact white-collar jobs by managing coordination and decision-making tasks.
- Generative AI tools are capable of tasks previously done by middle managers, potentially flattening hierarchies.
- Other companies like Target and Paramount are also implementing significant layoffs amidst economic shifts.
The move might provide an initial look at AI's actual impact on employment: not by swiftly replacing the predictable, manual factory jobs people anticipated, but by diminishing the white-collar positions that manage those operations.
Amazon revealed on Tuesday its intention to eliminate approximately 14,000 corporate positions, representing about 4% of its non-hourly staff, as part of a strategic realignment aimed at “reduce bureaucracy” and “remove organizational layers,”, as detailed in a memo. Beth Galetti, Amazon's senior vice president of people experience, communicated in a memo that these reductions are intended to foster a more streamlined and adaptable organization while increasing its focus on generative AI investments. Essentially, this move signifies a belief that artificial intelligence can manage numerous tasks related to coordination, reporting, and decision-making previously handled by human supervisors.
Over the past year, CEO Andy Jassy has been frank about Amazon’s transformation.
“We’ll need fewer people doing some of the jobs that are being done today,” he told employees earlier this year, citing generative AI’s growing role in planning, analytics, and forecasting. Those tools, he said, are already helping teams “move faster and make better decisions.”
This approach is gaining traction throughout American businesses. Generative AI tools are now skilled at precisely the kinds of tasks that occupy middle managers' time, such as compiling updates, composing memos, creating status reports, and condensing meeting discussions.
It remains uncertain whether Tuesday's announced layoffs stem directly from that assessment, from the notion that generative AI can handle middle-management duties as effectively, or even more so, than people. Nevertheless, for leaders facing pressure to enhance productivity while reducing expenses—and especially for those with a penchant for cutting—the attractiveness of a more streamlined organizational structure is evident.
Yet there’s an irony here. Amazon—the company that pioneered warehouse automation and made robots the poster child of blue-collar disruption—is now signaling that the white-collar workforce may be first to feel AI’s bite. Analysts at Gartnerestimate that by 2026, one in five organizations will use AI to eliminate at least half of their management layers.
The timing couldn’t be worse for workers, particularly younger ones, who are trying to move up. Federal Reserve Chair Jerome Powell warned in September that hiring has slowed “in a noticeable way,” especially for early-career employees. Powell and other economists have acknowledged that the economy has entered a “low-hire, low-fire” phase, where companies are reluctant to add jobs even as growth continues.
“If people are getting more productive, you don’t need to hire more people,” Airbnb CEO Brian Chesky told the Wall Street Journal. “I see a lot of companies preemptively holding the line, forecasting, and hoping that they can have smaller workforces.”
Amazon isn't the only one. This week, Targetannounced announced its initial significant layoffs in ten years, reducing employment by nearly 2,000. Paramount, fresh from its merger with Skydance, is similarly laying off shedding 1,000 positions this week amidst its ongoing reorganization.
If AI flattens corporate hierarchies, creating a “low-hire, high-fire” market, that could further erode the traditional career ladder and potentially be destructive across all layers of the economy. This just so happens to be the picture painted by the latest Challenger, Gray & Christmas report, released Oct. 2. According to the outplacement and executive coaching firm, U.S. Employers announced 946,000 job cuts so far this year, the highest year-to-date total since 2020, with over 17,000 explicitly attributed to artificial intelligence and another 20,000 tied to automation and “technological updates.” Tech firms alone have shed 108,000 jobs in 2025, and retail layoffs are up 203% year over year as companies brace for a slower holiday season, the firm said. “It’s very likely job cut plans are going to surpass a million for the first time since 2020,” Andy Challenger, senior VP at Challenger, Gray & Christmas, wrote in the report. “Previous periods with this many job cuts occurred either during recessions or, as was the case in 2005 and 2006, during the first wave of automations that cost jobs in manufacturing and technology.”