Inside Amazon’s Layoffs and What Culture Has to Do With It | Fast Five Shorts

Amazon is planning a second round.

This one's going to be huge.

I can't wait.

It's so, so timely that Amazon makes this announcement today and have you on the show.

So Amazon is planning a second round of corporate job cuts this week as part of its broader goal of trimming approximately 30,000 white collar workers, with CEO Andy Jassy attributing the cuts to bureaucracy and culture rather than AI or financial pressures.

According to Reuters, Amazon cut approximately 14,000 corporate jobs in October and is planning to cut roughly the same number this week.

And actually just came out this morning before we went to print that that number is roughly 16,000, I believe, potentially beginning like you said, as early as today.

The layoffs will affect Amazon Web Services, retail, prime video and human resources units, though the full scope does still remain unclear.

CEO Andy Jassy told analysts during the company's Q3 earnings call that the reduction was, quote, not really financially driven.

And it's not even really a I driven.

Rather, it's culture, end quote.

Explaining that you, quote, end up with a lot more people than you had before and you end up with a lot more layers.

Oh my God, this is going to be a field day for you, Jen.

And quote, the 30,000 total job cuts would represent nearly 10% of Amazon's corporate workforce, but only a small portion of the company's 1.58 million total employees.

I had no idea they had that many employees, with the majority working, of course, in fulfillment centers and warehouses.

This would be the largest layoff in Amazon's three decade history, surpassing the approximately 27,000 jobs trimmed in 2022.

Jen, Andy Jassy says this is all about culture and bureaucracy and not AI or finances.

Do you buy that explanation?

And also here's the second question.

How should the broader industry examine this plan and what action should they be thinking about taking?

Okay, so first of all, I think between the two cuts since October, there's 30,000 jobs.

Ish.

Yeah, right.

So I just take a minute and say that's never to be taken lightly.

I feel for those affected, that's really hard stuff.

Right?

Headlines every single day, corporate layoff.

So I want to just take a moment and play on the human aspect of it.

Like that is very hard.

Now, to answer your question, am I buying the explanation here?

I can only hope that Andy honestly sees bureaucracy and these quote unquote layers that have been created as a real issue, because I do.

I believe that is a huge issue.

And I think anyone in corporate retail at a leadership level feels frustrated by this like additional bureaucracy.

17 layers of approval.

I'm at a senior director role, VP level role.

We talk to these executives every day on our team and they feel like they still don't get to own their business like they used to.

Right.

Like I've been.

Business has changed.

Right.

And it sounds like you were there.

Right.

So I'll never go back for that reason, actually, because I have a lot more autonomy in what I do now.

Yeah.

And I think we see.

And this is sort of a side note and then I'll get back to answering your question.

But we see we also work with manufacturing and distribution that is private equity backed.

So they're like the small to midsize growing when PE steps in.

And I know not everybody loves private equity, but when PE steps in, they do trim the fat.

They minimize the layers.

And they say, you own your business and here's how, how we grow.

And some of the leaders that step out of corporate retail and into those more PE backed environments, they thrive because of the autonomy.

There's pressure, but there's autonomy.

I've never thought about that actually, Jen, that's really, that's really interesting, the dichotomy between private equity.

Which makes sense.

Yeah.

Cause they're going to trim everybody out and you just got to own it and get it done.

And if you don't, you're out probably.

Right, Right.

And then.

But if you are owning it and you're getting results, they give you even more ownership.

Like, great, just send me a text before that approval.

Instead of.

In today's retail corporate America, you have to make 17 slideshows and change the borders six times right.

Before you can get that approved.

So anyways, to go back to this.

Am I buying the explanation?

I mean, look, I think both can be true.

I think hopefully again, I very much hope that he sees this as an issue and he's like, look, let's try to minimize the layers in bureaucracy and let our team do their work.

But at the same time, of course there's a financial impact here.

I mean, when you trim 16,000 jobs, there's definitely a financial impact.

And of course, AI, when done right, allows strategic talent to do so much more with less headcount.

So I think AI enables some of them, some of these jobs to be cut and the work to go on.

Would I.

Here's the second part of your question.

Would I suggest that the broader industry take note?

Um, I don't know if people are going to like my answer here, Chris, but we're going to Be honest here on the Omni Talk.

Yeah, we a hundred percent are going to be frank.

Yeah.

So I, I just would truthfully say I think most organizations could cut 10% of their corporate teams and be more effective, more efficient.

As long as it's done really well.

I think it's good business.

In some ways we're not the same business we were 10 years ago.

We shouldn't have the same size teams we had 10 years ago.

I think it just makes sense.

What I've seen that has gone wrong is some of these organizations making these types of cuts and saying hey, AI can help.

But instead of actually doing the work to create better budgets, better support, better tech, they're giving them like half baked tech.

Here's a chat GPT and now can you do six jobs?

Because we just cut the five around you and that's going to burn out top talent fast.

Right.

So I think, I mean it has to be done really well.

I'm not sitting here saying I'm going to be the expert on how to do that, but I've seen it gone wrong when it's done incorrectly.

But overall I, I'm a fan of trimming the fat at the, on the corporate teams and, and just hiring better A players for the roles that you keep.

That's really interesting too.

I didn't expect to go in that direction.

It's funny because it's timely.

I'm having a cop, I'm doing a recording a podcast with Experian Technologies on Monday and that's one of the questions I'm going to ask them is like, how do you actually implement AI through for the purpose of workplace efficiency?

And when you put it in the context of like how do you think about your organizational design?

I think that's a really great point you're making Jen, is like I would probably experiment with what the right answers are for workplace efficiency before I just go and make cuts on the idea that AI can get me to the place I want to be.

And in general there's probably just as what I heard you say, in general there's probably just ways to trim the fat in the organization too.

So I'm glad you came back around on that because I was going to, I was going to ask you that but I mean for me I, I, I fundamentally agree with everything you said.

I think the way I'd sum it up from my perspective in my language is like, I think it's just good business and does it have to do with AI or does it not Like I don't think that question really matters.

It's kind of a, it's kind of a moot point at the end of the day.

And at the end of the day, you just always need to get in front of things and get leaner as much as you can.

And so whether that's chewing the, or trimming the fat or employing AI, like it doesn't really matter.

And so like, I think it's just good business.

And I think to your point too, the smart retailers are looking at this announcement and going, huh, do I need to take a hard look at this in my organization?

And my question for you though is like, how many, how many executives you think are doing that versus they're just like, this is a one off, Like I'm not going to pay attention to it.

I'm just going to look at my organization, keep running it the same way.

Or do you think most of the leaders generally are trying to look at this type of thing?

Every single year, to my knowledge, in our clients and in our network, every single year we're looking at workplace efficiency and org charts.

What I don't know.

I know, you know, some people put it on hr.

Like, hey, is HR working on this?

Well, here's the deal.

If we're talking about it being done well, you have to tell HR what you can and can't do without and where you could thrive.

And hey, we can get rid of two headcount because I want to implement this tech to take over.

Like there has to be again that plan.

It's not just HR makes the decision and OPS has to deal with it or OPS makes the decision and tells HR there really needs to be a collaboration there for it to be done well.

Right, and that, that goes back to your point about bureaucracy too because that becomes difficult as an executive too because how much of that do you actually own in terms of determining the design and creation of your organizational structure underneath you?

So it's kind of like a chicken and the egg thing that you start to get into here if you're not careful as well.

For sure.

I mean, in my ideal situation, and unfortunately they don't always call me Chris.

I don't know why they don't always call me either.

Listen to me either, Jen.

But in my ideal situation, you leave it up to the business leader, right?

As much as possible you say, hey, here's what we need to hit.

Here's the margins we need to be at, here's the revenue, here's the plan.

Everyone has a budget, we're in retail we watch every dollar in that, let them figure out how to get there, but then it's on them if they don't.

Right.

If you decide to headcount is what you needed, but now you're not hitting plan, you know, bad plan, figure it out, go fix it.

That's what I think.

Yeah.

And the other thing I've been thinking a lot about too, Sorry, I'm gonna go long here because I think this is a really important conversation.

I think it's really important for all the executives out there to hear it too, is, you know, with AI, like I'm almost, I'm almost of the opinion that if I was leading a retail company, I would be going to my executives and saying, okay, you come back and tell me, because you've been around and exposed to AI for the last two years, where do you think it's applicable in your organization?

And how much efficiency do you think you can get?

And I do that for two reasons.

One, because the exercise is going to be beneficial just in, in general to decide where and how you could strip things out.

And then two, the other point for me as the leader, it tells me who's really equipped in having that conversation and who really understands what I can do.

For me now as a CEO, I might need help to bring in to understand, engage that acumen, but that's the conversation.

I don't know, what do you think of that approach, Jen?

Because I think that that is something I would be thinking very hard about doing.

100% we say all leaders in this industry are now tech leaders.

I mean, we cannot have really strong operators that just like, oh, I don't, I don't dabble with that.

It's just not, it's not the way you run business anymore.

Right.

So I would say 100 the best leaders in this industry and even things that our clients are looking for is, are they forward thinking, are they going to bring us tech solutions, Are they going to do the work?

Right.

Because there's not this one IT team that can assess every single AI solution for every single team.

It's just too complex, right?

It doesn't.

And to be honest, if I'm owning the business, if I'm owning marketing, I don't want the IT team to tell me what I should explore.

I want to go out there, explore the options and then bring back like, hey, IT team, I've heard about these three options that I'm really interested in.

I've done these demos.

I understand what they could do for us.

Can you now explore Right.

I think there's, I guess I would just say I agree with you 100% and clients are definitely looking for that in leadership today.

Yeah, yeah.

And here's the goal that I'm putting to my work ultimately that we're all driving to and holding hands to get to.

I think that's the other important thing.

You've got to put your feet to the fire as a leader to say like at some point, like, here's what I'm going to get, here's what I'm going to get back for the organization.

And it's going to take a lot of tough conversations as well along the way too.

Both for.

With the deciding the tech and ultimately the layout.

The impact downstream to the workforce too over the years.

That's right.

The other thing I just want to, because I could get on a soapbox about this, I just want to share is the time is now to make sure you are bringing in the most strategic talent.

If you have doers, and we have a lot of doers and leadership seats.

It's just the way the industry has worked.

Right.

And they're probably fantastic at doing.

But you can't run an organization or a successful team with AI if you are not strategic and truly strategic in the way you're going to use that AI because you do need to ask follow up questions.

You do need to make sure it's not hallucinating.

You do need to.

There's just the way you drive AI.

I would say matters.

And if you put a C player in a seat with AI, you're going to get F results.

That's my, that's my opinion.

If you put an A player in a seat with the right AI, you're gonna get tremendous results and you're gonna see all of the benefits.

But it doesn't replace people.

It means your people should be more better, honestly, because you can do more with less in that way.

Does that make sense?

Yeah, it does.

It's like we said on the show many times, it's a management tool first and foremost for better efficiency and re engineering processes and getting to places you never could as an organization too.

That's the other inherent thing that I learned and have been thinking about ever since nrf.