Amazon CEO Andy Jassy said this week the company plans to reduce its workforce over the next few years, while Microsoft (MSFT) is reportedly preparing for thousands of layoffs — both moves coming as the tech giants pour billions into artificial intelligence development.
According to Bloomberg, Microsoft is expected to unveil the layoffs early next month, targeting its sales teams. The report cited anonymous sources.
Microsoft did not confirm the cuts in a statement to Yahoo Finance. “As they typically do year-round, teams evaluate business priorities and ensure they are aligning to the right opportunities for strategic growth,” a spokesperson said.
The developments followed Jassy’s remarks Tuesday, where he acknowledged AI-driven restructuring would lead to job reductions at Amazon.
“As we roll out more Generative AI and agents, it should change the way our work is done. We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs,” Jassy said in a memo to employees.
“It’s hard to know exactly where this nets out over time, but in the next few years, we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company.”
Jassy noted Amazon is “using Generative AI broadly across our internal operations” in areas like inventory management and demand forecasting for its delivery network.
Because of AI, he added, “We’ll be able to focus less on rote work and more on thinking strategically about how to improve customer experiences and invent new ones.” The comments sparked backlash from some employees.
Meanwhile, Amazon is also pushing ahead with return-to-office efforts. Bloomberg reported Thursday that some corporate staffers have been instructed to relocate closer to their teams and managers, potentially requiring cross-country moves to hubs such as Seattle and Washington, D.C.
Both Amazon and Microsoft have significantly ramped up AI investments. Amazon has led the hyperscaler pack in capital spending in recent years, largely due to its AI infrastructure buildout. That trend is expected to continue in 2025, with Amazon projecting about $105 billion in total spending — most of it earmarked for Amazon Web Services. Microsoft is on track to spend $80 billion next year on expanding its AI data centers.
Layoffs aren’t new for either company. Microsoft cut 3% of its workforce in May following a strong earnings report. Amazon has eliminated over 27,000 roles between 2022 and 2023, with another 100 jobs cut in May as Jassy accelerates efforts to flatten management and operate Amazon more like “the world’s largest startup.”
According to a recent report from Challenger, Gray & Christmas, “technological updates” such as AI implementation were behind 20,000 layoffs in the first five months of 2025. Last year, Goldman Sachs estimated that generative AI could eventually automate up to 25% of jobs across all industries.
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