As artificial intelligence reshapes the global tech industry, two of the sector’s biggest players Amazon and Microsoft are preparing for a new era of streamlined operations, one that comes with a steep human cost.
Amazon CEO Andy Jassy this week acknowledged that the company will reduce its corporate workforce in the coming years as a direct result of deploying generative AI across internal operations. Meanwhile, Microsoft is also reportedly planning thousands of layoffs, primarily targeting sales teams, as it doubles down on its own AI infrastructure push.
While the two companies are investing billions into AI development, the unintended consequence appears to be a wave of job reductions that industry analysts say could only be the beginning.
“Fewer People Doing Some of the Jobs”
In a memo to employees on Tuesday, Jassy offered a blunt assessment of AI’s disruptive potential.
“As we roll out more generative AI and agents, it should change the way our work is done,” he wrote. “We will need fewer people doing some of the jobs that are being done today and more people doing other types of jobs.”
Though Jassy did not provide specific numbers or timelines, he said the long-term impact would result in a net reduction in Amazon’s corporate workforce. The company has already laid off more than 27,000 employees between 2022 and 2023 and cut an additional 100 jobs this May as part of a larger effort to streamline middle management.
Jassy emphasised that Amazon is already integrating AI into key functions like inventory management and demand forecasting. “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,” he added.
The announcement was met with concern among Amazon employees, especially as some now face internal relocation orders to central office hubs such as Seattle and Washington, D.C., according to a Bloomberg report.
Microsoft Quiet on Layoffs, But Rumours Swirl
Microsoft, for its part, has yet to publicly confirm impending job cuts, but Bloomberg reported the company is planning thousands of layoffs, primarily within its sales divisions, with an announcement expected early next month.
When asked for comment, a Microsoft spokesperson avoided specifics, saying only that the company routinely evaluates its workforce to align with “the right opportunities for strategic growth.”
The looming cuts follow Microsoft’s recent decision to lay off 3% of its workforce in May, despite reporting strong earnings. As with Amazon, the company’s rationale is rooted in an aggressive shift towards AI, which demands new skills and automation-friendly infrastructure.
Billions Poured Into AI But at What Cost?
Both Amazon and Microsoft are pouring enormous sums into AI development. Amazon is projected to spend approximately $105 billion in 2025, with the lion’s share earmarked for AI infrastructure within its cloud computing arm, Amazon Web Services. That figure surpasses spending by any other major “hyperscaler” in the tech industry.
Microsoft, too, is committing massive capital, with $80 billion set aside in 2025 to expand its AI data centres.
But the scale of investment appears to be coming at the expense of traditional roles, particularly in middle management and operational support. This shift reflects broader industry trends: according to job placement firm Challenger, Grey & Christmas, “technological updates” such as AI integration led to 20,000 layoffs in the first five months of 2025 alone.
A Broader Trend: AI and the Future of Jobs
The growing use of generative AI is sparking existential questions across industries. In a 2024 report, Goldman Sachs estimated that nearly 25% of jobs could be automated across all sectors, with white-collar roles among the most vulnerable.
As Amazon and Microsoft reshape themselves around AI, their strategies are likely to set precedents for other corporations navigating the same shift. For workers, the message is clear: adapt to the AI-driven future or risk being left behind.
The real challenge now, analysts say, will be whether the new roles created by AI offset the ones it renders obsolete and whether companies like Amazon and Microsoft can lead that transformation without leaving a workforce crisis in their wake.
