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Why Amazon Just Cut Hundreds of Jobs at Its Seattle Headquarters

3 minute read

Amazon.com Inc. is cutting hundreds of jobs at its headquarters in Seattle, paring back older departments focused on selling goods online while hiring in newer lines of business like cloud computing and its Alexa platform.

The reductions are part of a broader reorganization at the company, but some see the moves as a shift toward using more robots and computers for functions once performed by humans.

Amazon is automating tasks such as forecasting demand for new products and negotiating their prices, said Michael Lagoni, chief executive officer of Stackline, an e-commerce data analytics firm that helps brands and manufacturers sell on Amazon.

For instance, someone selling televisions would have to call an Amazon buyer, show them the product and negotiate terms for selling it on the platform. Now, those functions have been mostly automated, Lagoni said. Amazon is also making manufacturers and suppliers do more work — such as coordinating marketing and promotions — things that Amazon used to handle internally, he said.

“Amazon’s business is growing, not declining,” said Lagoni, who spent a year at Amazon before launching his company. “They are either automating the work or passing it back to manufacturers to do themselves.”

The reduction in positions is modest for Amazon, which counted 566,000 total employees at the end of 2017, up 66 percent from the previous year due largely to its acquisition of Whole Foods.

Amazon didn’t comment specifically on the use of automation.

“As part of our annual planning process, we are making headcount adjustments across the company – small reductions in a couple of places and aggressive hiring in many others,” the company said in an emailed statement. “For affected employees, we work to find roles in the areas where we are hiring.”

Amazon has 3,900 corporate jobs open in Seattle, part of 12,000 such positions open worldwide, according to a person familiar with the matter.

Amazon has been expanding in e-commerce categories such as groceries, fashion and furniture while also building its cloud-computing division Amazon Web Services and finding new uses for its voice-activated Alexa service.

Amazon said last year that it planned to create 100,000 jobs in the U.S. as it bulks up fulfillment centers and adds more customer service representatives. The company is also in the process of choosing a city for its second headquarters, dubbed HQ2, where it plans to create 50,000 jobs in the next 10 to 15 years.

The Seattle Times reported the job cuts earlier Monday.

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