Amazon cuts 14,000 jobs: is culture a valid reason to layoff employees?

In yet another wave of mass layoffs, tech giant Amazon has recently announced its plans to cut 4,000 of its global workforce.

However, the company’s rationale behind this significant move has caught the attention of the business world. CEO Andy Jassy says the decision isn’t because of finance or artificial intelligence (AI) — but company culture. 

But given the company’s highly publicised positive workplace environment, the move begs the question about whether using culture as a reason for redundancies is fair — or if it’s only going to land businesses in hot water legally. 

Amazon claims redundancies are because of “culture”

According to CNN, the company’s announcement wasn’t due to cost-cutting or AI technology. Instead, it was around organisational culture.

Speaking on Thursday’s earnings call, Jassy said that the company’s current number of employees can “weaken the ownership of those that you have who are doing the actual work”, leading to a slowdown in leadership. 

“We are committed to operating like the world’s largest startup, and…that means removing layers,” he continued.

However, just two days before, Amazon announced that its organisational changes were more about staying “nimble” in preparation for AI advancements. 

Amazon’s latest revelation comes in the wake of mass layoffs and the “cut-throat” culture in tech companies this year. The announcement comes nine months after Meta revealed plans to cut 5% of its workforce, specifically targeting roles the company believed were underperforming.

“Culture” cuts put Amazon’s ethos in the spotlight

This is far from the first time Amazon has announced mass layoffs.

However, its latest decision to cut employees to improve its culture casts a new light on the company’s long-standing reputation for its high-pressure and results-driven workplace.

This is reflected in the company’s global staff turnover, which, according to The Morning Star, is at 150% — meaning the number of employees leaving the company is higher than the total number of employees.

Many people point to the tech giant’s alleged toxic culture for this high number.

It was reported that some employees have suspected that the company’s new return to office (RTO) mandate — which requires staff to work from the office five days a week — is part of a quiet firing plan. This includes managers reportedly being instructed to assign lower performance ratings to employees who don’t comply with this policy.

Amazon layoffs: lessons for small businesses?

Sometimes, letting people go is unavoidable, but cutting staff over “culture” can backfire. It can harm morale, lead to lower employee engagement, and risk reputational damage. 

It can also lead to serious legal issues, as terminating employees for vague cultural reasons can lead to employment tribunals for unfair dismissal or discrimination.

Ultimately, small businesses should only consider redundancies when there’s a clear and objective reason for reducing staff, such as financial strain, operational changes, or just terminating roles that are no longer needed. 

However, Jassy’s comments suggested the layoffs were aimed at streamlining operations, that a larger workforce and excessive layers can “weaken the ownership” of employees doing the actual work and “slow down” the leadership team.

Whilst UK SMEs operate on a vastly different scale, the Amazon situation offers a critical takeaway: clarity and efficiency in team structures are essential for growth.

For small businesses, the risk isn’t about having too many layers, but ensuring every hire has a clear, valuable role and the authority to execute it effectively.