Amazon.com Inc. (AMZN) is reshaping its global workforce in a delicate balancing act between cutting costs and pouring money into artificial intelligence and cloud infrastructure. The latest move hits close to home for the company's European operations.
Luxembourg Takes the Biggest Hit in Decades
Amazon plans to eliminate 370 positions in Luxembourg, roughly 8.5% of its workforce there. These cuts represent the largest layoffs the country has seen in at least twenty years, a significant milestone for a nation where Amazon has been expanding since 2003.
The company maintains its European headquarters in Luxembourg's Kirchberg district and currently employs 4,370 people in the country. Even after shedding these positions, Amazon will still rank as Luxembourg's fifth-largest employer.
Here's an interesting wrinkle: under EU labor laws, Amazon had to negotiate with employee representatives. The original plan called for cutting 470 jobs, but through negotiations, the company agreed to reduce that number to 370. Most affected workers will receive notification in February.
Amazon characterized the cuts as reflecting "business needs and local strategies" and noted that severance packages will exceed industry standards. Software developers are expected to be among those affected.
The Luxembourg cuts are part of Amazon's broader plan announced in 2025 to eliminate 14,000 positions worldwide.
The Bigger Picture: Global Restructuring Under Pressure
Amazon's expenses tell the story of a company investing heavily while trying to maintain discipline. Third-quarter expenses climbed to $162.7 billion, up from $141.5 billion in the same period a year earlier.
An October report revealed that Amazon is considering cutting up to 30,000 corporate jobs to streamline operations and correct for hiring that exploded during the COVID-19 pandemic. If that materializes, it would represent nearly 10% of the company's 350,000 corporate workforce and would be the largest reduction in Amazon's history.
The restructuring spans multiple divisions including human resources, operations, devices and services. This comes after smaller rounds of cuts over the past two years.
The $2.4 trillion company's stock has gained just over 1% year-to-date, a modest performance that reflects investor anxiety about heavy AI spending and slower growth at Amazon Web Services.
AI: The Reason for Cuts and the Path Forward
CEO Andy Jassy is driving the restructuring to reduce costs, flatten management layers and improve efficiency. Interestingly, he's also pointing to AI itself as a justification for eliminating repetitive roles.
Wall Street's mood on Amazon has brightened following the AWS re:Invent conference. Analysts from Bank of America Securities' Justin Post, JP Morgan's Doug Anmuth, and Wedbush's Scott Devitt highlighted meaningful progress in several areas: new autonomous AI agents, improved performance from Amazon's custom Trainium chips, and deeper integration with Nvidia technology.
They also pointed to AWS AI Factories and expanded foundation models as evidence that Amazon is positioning its cloud platform to capture surging enterprise demand for generative AI. The company appears to be closing the gap in the AI race with advances in custom chips.
AMZN Price Action: Amazon.com shares were up 0.30% at $223.12 at the time of publication on Tuesday.