Amazon confirms plans to cut around 14,000 office jobs

The world's largest online retailer, Amazon, is cutting around 14,000 administrative jobs.

In a statement, the company attributed the cuts to organisational changes in the age of artificial intelligence. Shipping operations in Germany and other countries are not expected to be affected by the reduction in office jobs. It was initially unclear to what extent jobs in Germany would be affected by the cuts.

Restructuring for AI

Amazon itself raised the question of why it was making cuts while business was performing well. The response was that one must not forget the world is changing rapidly. The group pointed to current applications of AI that enable faster innovation. Therefore, the company must position itself to be as lean as possible.

For months, there has been discussion about whether AI software like ChatGPT or Claude from the Amazon-backed developer Anthropic could make many office jobs redundant. According to the developer companies, these programs can independently handle knowledge-based tasks and automate administrative processes. This development has so far been felt by employees in programming jobs, among others, as AI is proficient at writing software code.

No impact on deliveries

Consumers in Germany are unlikely to feel the effects of the job cuts. This is because the cuts only affect administrative roles, not the employees in the vast warehouses. Furthermore, the parcel couriers who deliver the shipments are not directly employed by the company but work as subcontractors, a situation the Verdi union has criticised for years. Verdi generally has a poor relationship with Amazon, as the company has long refused to enter into a collective bargaining agreement.

At the same time, Amazon is investing significantly more in Germany than before. According to company data, this amounted to around 14 billion euros in 2024, two billion more than in 2023. Germany chief Rocco Bräuniger stated at a company presentation in September that strong investment would continue. At that time, there was no mention of job cuts. The investments are largely directed towards better automation of logistics processes, with an increasing number of robots being deployed to take over human tasks.

Around 40,000 jobs in Germany in total

The US group has over 40,000 employees in Germany at more than 100 locations. These include sorting and logistics centres; administrative offices in Munich and Berlin; and development sites. For example, work is being done in Aachen to improve the Alexa voice assistant and its understanding of German dialects. Data centres for the cloud division, Amazon Web Services (AWS), are also part of this. In terms of personnel, there has been significant growth in Germany recently, with the company creating 4,000 jobs within a year.

Reports of even larger cuts

In its statement, Amazon pointed out that new jobs would be created in other areas simultaneously. Most of the affected employees will also be given 90 days to look for other positions within the company. The Wall Street Journal, among others, reported, citing informed sources, that up to 30,000 jobs could be affected by the cuts in several waves. This could also be accurate, given the simultaneous creation of jobs in other areas.

Largest online retailer in Germany

Roughly 60 percent of online retail in Germany is accounted for by Amazon. This includes its marketplace, where other smaller retailers use Amazon as a sales platform.

The Federal Cartel Office is critically monitoring Amazon's development and is taking action against the US company. The competition authorities see a “paramount cross-market significance for competition.” The federal authority has raised concerns that Amazon is exploiting its market power to the detriment of consumers and other retailers. There are currently two proceedings against Amazon. One concerns allegations of price control, for which Amazon has already received a warning. This is still a preliminary assessment, and Amazon now has the opportunity to comment.

Amazon's growing importance in the parcel market

Amazon is becoming increasingly important not only as an online retailer but also as a parcel company. While goods ordered from the online retailer are also delivered by logistics providers like DHL, a larger proportion is now handled by Amazon itself. According to the Federal Network Agency, Amazon is already number two in the German parcel market, accounting for between 15 and 25 percent of delivered shipment volumes. DHL has a market share of more than 40 percent, significantly more than Hermes, DPD, UPS, and GLS, which only account for 5 to 15 percent.

This article was translated to English using an AI tool.

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