Big layoffs at Amazon, big implications for Seattle’s economy

The ax is falling on Amazon corporate offices.

The Seattle-based retail giant confirmed it will cut approximately 14,000 corporate jobs, and employees will begin receiving layoff notices starting Tuesday, Amazon announced.

It’s unclear how many of those jobs will be lost in Washington state.

Puget Sound Business Journal reporter Nick Pasion, who covers big tech, says the Amazon workers he’s talked to report that their managers are being tight-lipped, but “They are feeling a palpable sense of fear within the company, just concerned that they might be impacted. Some of their friends might be impacted.”

And that’s not a baseless concern.

“Amazon has about 350,000 corporate employees globally. So if you’re talking about up to 30,000, that’s a pretty substantial chunk,” said GeekWire co-founder Todd Bishop.

Amazon has yet to confirm the layoffs, let alone give a reason for them. Pasion says some of this may be due to post-pandemic downsizing.

“Amazon, pretty notoriously overhired during the pandemic. Their head count went up by, like tens of thousands of employees, during that period,” said Pasion.

But he notes the company has already done significant post-pandemic course correcting, laying off 27,000 employees in 2022 and 2023.

Amazon may now be looking to cut corporate jobs to reinvest in artificial intelligence infrastructure.

“Data centers, chips, getting power, all of that is super, super expensive,” said Pasion. “We’re seeing a lot of companies spend their free cash on that infrastructure and building it out and hiring artificial intelligence scientists to develop models internally, and those people are paid lots and lots of money for what they do.”

Bishop adds that tech companies are not only seeking funds to invest in AI, they’re also considering replacing some of their human workforce with it.

“What these companies are seeing are new efficiencies in many ways. They don’t necessarily need to have the same kinds of roles that they’ve had in the past, and in the process, there’s a certain amount of restructuring that’s inevitable,” said Bishop.

Regardless of the reason, Pasion says the layoffs could have a profound effect not only on Amazon’s workforce but also on the local economy.

“We do know that Amazon’s headcount is the largest in the Puget Sound area. So either way, this could have a big impact on kind of the local economy here, as we could see lots and lots and lots of employees lose their jobs almost overnight,” said Pasion.

Amazon isn’t the only high-tech Puget Sound–area company shedding jobs. Microsoft has cut 15,000 positions globally this year.

“In some ways, it’s a turning of the tide,” said Bishop. “There was a time just immediately post-pandemic, when tech companies were really pushing to hire and recruit and reward a lot of employees, especially those with technology experience and development expertise.”

“And here you’re seeing kind of a realization that perhaps those jobs don’t have quite the same cachet that they would have in the past,” said Bishop.

Pasion says local leaders and lawmakers who have counted on the strength and wealth of the region’s tech giants should take note.

“But what we’re seeing with these changes in the big tech workforce and kind of changes in the calculus that they’re doing in terms of how many employees they’re hiring, what jobs they’re posting, how many offices they’re leasing and how they’re expanding or contracting, is that that might not be as reliable of a mechanism for growth going forward,” said Pasion.