Amazon layoffs leave workers facing a tougher tech job market

Amazon’s record layoffs are still rippling through the tech job market, and former employees told CNBC the search for a new role has become slower, more crowded and more uncertain. For investors, the story shows the other side of Big Tech’s AI push: companies are cutting costs and shifting budgets while workers compete for fewer familiar jobs.

Amazon cut about 16,000 workers in late January, CNBC reported, after letting go more than 14,000 employees three months earlier. Together, those rounds marked the largest job reductions in the company’s history. CNBC said the company has eliminated more than 57,000 jobs since 2022, equal to roughly 16% of its corporate workforce.

The cuts landed in a tech labor market already packed with people leaving companies including Meta, Salesforce and Cisco. Challenger, Gray & Christmas said the U.S. tech sector has announced about 140,000 layoffs this year, more than any other industry. The firm said May was the sector’s worst month for job cuts since August 2024, before layoffs cooled in June.

Artificial intelligence, or software that can perform tasks such as writing code, answering questions and automating workflows, is a major driver of the reset. Challenger said AI was the top reason employers gave for layoffs for a fourth straight month and appeared in about 23% of all job-cut announcements this year.

Amazon CEO Andy Jassy has told employees that AI should change how work gets done and that efficiency gains from the technology will reduce the company’s corporate headcount over the next few years. Amazon spokesperson Montana MacLachlan told CNBC the company made the cuts so it can move quickly and serve customers, and said Amazon is still hiring and investing in important future areas. She said Amazon does not make layoff decisions lightly and works to support affected employees. Amazon told CNBC AI was not the reason for most of its layoffs.

Former staff describe a crowded search

Jake Linsley, a finance manager who worked at Amazon for nearly six years, told CNBC he learned he had been laid off in January after seeing a text on his phone. He spent about three months looking before joining a health-care IT startup as a vice president in April.

“I’d rather have a stable job than one that can grow 5x and disappear overnight,” Linsley told CNBC.

Courtney Haeflinger, who was laid off from Amazon Web Services in January, told CNBC she applied to hundreds of roles and struggled to get interviews before landing a job at AT&T. She said new openings often appeared to attract 200 to 300 applicants quickly, making it harder for real applicants to get noticed.

Dorian Smith, who worked at Amazon for more than 10 years and moved from customer service into web development engineering, told CNBC he applied to at least 250 jobs and heard back from four companies, all with generic rejections. He later found work at a late-stage startup after posting on LinkedIn.

AI changes the work inside Amazon

Some former employees said the layoff period pushed them toward smaller companies or AI-focused roles. Yogesh Verma, a former AWS engineer, told CNBC he took a slight pay cut in April to join an AI marketing company with hybrid work options and better work-life balance. Chris DeSantis, a former senior product manager in Amazon’s retail group, said he would accept lower pay to work closer to newer AI projects.

Inside Amazon, CNBC reported that AI use has become a visible part of work. Three current and former employees told CNBC some managers track staff use of internal AI tools through dashboards, and that certain teams factor usage into performance reviews. CNBC also reported that Amazon shut down an internal leaderboard in May after finding employees were using large amounts of AI tokens, a measure of how much text an AI system processes, to rise in the rankings.

Amazon has continued smaller cuts this year, including in customer service and third-party seller support, CNBC reported, citing people familiar with the matter. A Washington state WARN filing, a notice companies submit for certain layoffs, showed 57 Amazon employees were laid off in the state between May and early June.

This story draws on original reporting from CNBC Markets.