Amazon Announces New Phase of Workforce Reductions

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Amazon is moving forward with a significant corporate restructuring plan. According to insider reports, a second major wave of job cuts is set to begin this Tuesday, targeting thousands of corporate roles. While cost savings are a factor, CEO Andy Jassy's stated objective extends beyond finances to a fundamental reshaping of the company's internal culture. This raises questions about the future structure of the technology behemoth.

Despite the short-term disruption, Wall Street analysts have largely endorsed the company's stringent cost-cutting measures. Approximately 96% of covering analysts maintain a "buy" recommendation on Amazon shares, with an average price target near $295. Experts anticipate that the leaner organizational model will improve profit margins over the medium term. In the immediate term, however, the stock has shown volatility, declining roughly 6.6% over the past week to close at $231.19 on Friday.

Investors are now looking ahead to the next key date: February 5, 2026, when Amazon will report its fourth-quarter results. This release will indicate whether holiday sales met expectations and how quickly the costs associated with the ongoing restructuring are reflected on the balance sheet.

A Push to Streamline Bureaucracy

The rationale provided by top leadership for these drastic measures is notable. While efficiency gains from artificial intelligence were initially suspected as the primary driver, CEO Andy Jassy has corrected that assumption. During the latest analyst call, he clarified, "It's not really financially driven, and it's not really driven by AI." Instead, he pointed to an accumulation of excessive bureaucracy and too many management layers over the years. Jassy aims to accelerate decision-making and revive the "Day 1" ethos championed by founder Jeff Bezos.

Strategic Investments Continue

Paradoxically, the reduction in headcount does not equate to a blanket halt on investment. Strategic areas, particularly the cloud division AWS, continue to receive funding. AWS was responsible for 65% of Amazon's total operating profit in Q3 2025. In a recent development, the company announced this past Sunday the launch of a "European Sovereign Cloud." The restructuring of administrative functions appears designed to free up capital and resources to fuel growth in the cloud business and meet evolving regulatory requirements in Europe.

Scope of the Current Cuts

This action represents the final phase of a previously announced workforce reduction plan, following an initial step in October 2025. Reports indicate Amazon plans to eliminate several thousand more positions this week to meet its stated goal of cutting a total of 30,000 roles in corporate and administrative functions. This figure equates to nearly 10% of its white-collar workforce. The cuts are expected to impact central divisions across the company, including the profitable AWS cloud unit, the retail business, Prime Video, and the human resources department.