Layoffs up, hiring down as Amazon cuts reverberate through economy

Job cuts and other changes at Amazon, the country’s second-largest private employer, rippled through the economy this week, throwing workers at the company and some of its partners into a tough job market.

On Wednesday morning, thousands of corporate employees at the online retailer learned they will lose their jobs, part of ongoing layoffs first announced in October.

The day before, Amazon said it would shutter its Amazon Fresh grocery stores, laying off retail workers across dozens of stores. That same day, UPS said that it would be slashing 30,000 delivery jobs this year in part because of Amazon sending it less business.

The layoffs and closures underscore weak points in an economy that is doing well by some measures but in which workers face a tough job market that made 2025 the second-worst year for job creation since the Great Recession. Long-term unemployment in the United States is now at a four-year high, according to Bureau of Labor Statistics data.

Amazon’s moves to shed workers and lines of business also demonstrate how ongoing belt-tightening in the tech sector can cascade to other industries.

After a surge in hiring during the coronavirus pandemic and the end of low interest rates, Amazon and other tech giants have made deep cuts to their workforces in recent years. Microsoft cut its head count by 15,000 people last year. Meta laid off more than 1,000 workers this month in its Reality Labs division, as part of a plan to redirect resources from work on virtual reality toward AI-powered wearable devices, the company said.

The Chan Zuckerberg Initiative, the philanthropy created in 2015 by Meta CEO Mark Zuckerberg and his wife, Priscilla Chan, announced Wednesday that it was laying off about 70 people, or about 8 percent of its staff. The cuts are part of the organization’s pivot away from social issues to focus on “helping scientists cure all disease,” according to an internal memo reviewed by The Washington Post. A representative for The Chan Zuckerberg Initiative did not immediately respond to a request for comment.

Amazon said that about 16,000 roles would be eliminated. In a statement shared with employees Wednesday, Beth Galetti, the company’s vice president of people experience and technology, said that the organizational changes are “difficult news” but that the company is working to reduce bureaucracy and the number of layers in its organizational structure. (Amazon founder Jeff Bezos owns The Washington Post.)

Tech workers say that as layoffs by big firms have dragged on, hiring in the industry has lagged. In Silicon Valley, that slowdown has sharpened the contrast between the rank-and-file software engineers who are struggling and the AI stars being poached for astronomical sums.

CEOs in the tech industry, including Amazon’s Andy Jassy, have said that progress in artificial intelligence has increased the productivity of coders and allowed new efficiencies. “We expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company,” he wrote in a staff memo last year.

Last year, Salesforce CEO Marc Benioff said AI had enabled the company to “cut … heads” as he cut 4,000 jobs. On Monday, Pinterest announced it would cut 15 percent of its staff this year to “deliver on our AI-forward strategy.”

Amazon’s elimination of about 16,000 jobs starting Wednesday is part of layoffs first reported by Reuters in October. Amazon’s message to staff members did not specify which departments would be affected.

The staff cuts could have consequences for Seattle, where Amazon is headquartered. The metro area has an unemployment rate of 5.1 percent, according to the BLS, higher than the national rate of 4.4 percent.

Amazon’s closure of its Amazon Fresh grocery and Amazon Go convenience store businesses – 57 and 15 locations, respectively – led to the termination of workers in California, Illinois and Washington.

Since acquiring Whole Foods in 2017, Amazon has struggled to find a successful model for its grocery business and is now pivoting to focus on fast delivery from grocery hubs rather than high-tech brick-and-mortar stores. The company said it will continue to invest in grocery, with plans to build 100 new Whole Foods stores in the next few years.

“While we’ve seen encouraging signals in our stores, we haven’t yet created a truly distinctive customer experience with the right model needed for large-scale expansion,” stated a company email to affected staff members obtained by The Post. “Unfortunately, with this decision, your store is closing, and your role is being eliminated.”

The Amazon Fresh and Go stores will close by Sunday in all states except California, where they will close March 13 because of state regulations. Employees will be paid through April 28 and receive transitional benefits, the email said. Amazon declined to say how many people would lose their jobs.

Amazon has found more success with its investments in expanding its in-house logistics network and expanding its use of robots. One year ago, the company decided to reduce its reliance on third parties, cutting its package volume with UPS by half. On Tuesday, the logistics company announced it will cut 30,000 jobs this year, after cutting 34,000 positions last year.

“Due to their operational needs, UPS requested a reduction in volume and we certainly respect their decision,” Amazon spokesperson Kelly Nantel said. “We’ll continue to partner with them and many other carriers to serve our customers.”

Heidi Shierholz, president of the Economic Policy Institute, warned that Amazon’s latest cuts were relatively small compared to the wider U.S. economy.

“It’s really important to put them into the context that we normally have 1.7 million layoffs every month,” she said. But the broad slowdown in hiring across sectors is concerning, she said.

“Right now if you lose your job, it’s much harder to find a new one than it was in 2022 to 2024,” she said.

In late October, Jassy addressed the company’s shrinking head count during the company’s quarterly earning calls. He said the cutting is “not really financially driven, and it’s not even really AI driven.” Rather, he explained, the layoffs are meant to combat what he described as unnecessary layers of staff slowing the company down.

Danielle Abril covers technology and its impact on workers across industries for The Washington Post. Send tips on Signal to DanielleAbril.01.

Aaron Gregg and Naomi Nix contributed to this report.