Why Amazon Plans to Cut 30,000 Jobs

Summary

WSJ What’s News – “Why Amazon Plans to Cut 30,000 Jobs”

Date: October 28, 2025
Host: Caitlin McCabe
Guests: Sean McLean, Conrad Puzier, John Emont

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Episode Overview

This episode of WSJ What’s News centers on Amazon’s decision to lay off up to 30,000 corporate employees in a bid to cut costs and redirect resources toward artificial intelligence (AI) and cloud computing. The hosts and guests analyze Amazon's broad restructuring, discuss the current climate of job cuts and economic uncertainty in corporate America, and address other macroeconomic stories, including persistent inflation, the rare earths investment boom fueled by Chinese export controls, and a political controversy over the use of the auto pen in the Biden White House.

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Key Discussion Points & Insights

1. Amazon’s Layoffs: Scope and Reasoning

• Announcement Details

  • Amazon is set to cut about 10% of its corporate workforce—up to 30,000 jobs, with reductions impacting human resources, cloud computing, advertising, and more.
  • "The cuts could begin as soon as today, but won't happen all this week. Human resources, cloud computing, advertising and a number of other business units are expected to be affected." (Caitlin McCabe, 00:46)

• Underlying Drivers

  • Pandemic Hiring Boom: Amazon expanded rapidly during Covid, resulting in a potentially bloated workforce.
  • Cost-Cutting & AI Investment: The company is now seeking to trim costs and free up capital to invest in AI, chips, and cloud computing to remain competitive with Google, Microsoft, and Nvidia.
  • "It'll be one of the largest layoffs in the company's history and it underlines the pressure that large corporations, large tech companies, any big employer is having right now in the US." (Sean McLean, 01:50)
  • "Amazon wants to cut spending from what they saw as a period of overexuberant growth, but at the same time find cash to spend on AI." (Sean McLean, 01:50)

• Unprecedented Move for Amazon

  • Historically, Amazon avoided large, headline-grabbing layoffs; this marks a significant shift in company culture and operations.
  • "Amazon until the last couple years hadn't been known for these huge headline grabbing layoffs. And certainly this latest announcement seems to hit almost every corner of the business, at least on the white collar side." (Sean McLean, 03:36)

2. The Bigger Picture: Corporate America’s AI Pivot & Economic Uncertainty

• Macroeconomic Context

  • Sluggish job growth, economic uncertainty, inflation, and ongoing trade tensions are pressuring corporations to do more with less.
  • "The broader context really is this period of uncertainty in corporate America where job growth is slowing, the economy is less certain, prices are going up, consumer sentiment is down..." (Sean McLean, 02:51)

• AI as Productivity Solution

  • Leaders like Amazon’s Andy Jassy are increasingly relying on AI to boost productivity and minimize headcount growth (or direct reductions), especially among white- and blue-collar workers.
  • "So you're seeing CEOs wanting workers to be more productive with AI tools... finding ways to have robots and AI tools enable headcount to either reduce or slow down in growth without hurting business growth." (Sean McLean, 03:14)

3. Inflation: Persistent and Disproportionate

• Latest Inflation Data

  • September inflation hit 3%, just above the Fed's 2% target but lower than forecasts.
  • "There was a collective sigh of relief at the end of last week when inflation numbers finally arrived, reaching 3% in September." (Caitlin McCabe, 04:01)

• Impact on Americans

  • Lower and middle-income Americans feel inflation more acutely due to greater price hikes for cheaper goods and slower wage growth.
  • "If you're a lower income American, your wages are not rising the way they did last couple years ago. But inflation hasn't gone away. So you're getting squeezed from two sides. You're not earning as much anymore, and the money that you do earn doesn't go as far." (Conrad Puzier, 05:36)

• Lingering Disillusionment

  • Frustration lingers after policymakers said earlier inflation spikes would be “temporary.”
  • "Americans are upset. Americans are really mad about inflation... we were told by economists and policymakers... that this is a temporary thing and everything's going to go back to normal. And that's sort of true... but at the same time, inflation hasn't gone away and it's still way too high." (Conrad Puzier, 06:07)

4. Rare Earths: Investment Surge Amid Trade Tensions

• China’s Export Restrictions

  • China imposed tighter controls on rare earth exports, sparking a rush of investment into Western critical minerals industries.
  • "China just controls every part of the rare earth industry... and they keep prices generally very, very low." (John Emont, 08:00)

• Western Response

  • Massive influx of private and governmental funds into Western mining and processing projects in the US and Australia.
  • "A big export bank that's affiliated with the United States government... put $2.2 billion into seven critical mineral projects in Australia... JP Morgan has pledged to back some of these projects... stock prices of all these companies have gone way, way up." (John Emont, 08:33)

• Long-Term Impact

  • Even with diplomatic negotiations, Western companies are unlikely to abandon the push to diversify away from Chinese supply, given ongoing risks.
  • "Tweaks around the edges are not going to satisfy Western companies that really rely on Chinese rare earth magnets. They're going to want almost certainly another source..." (John Emont, 10:59)

5. Political Spotlight: Biden, the Auto Pen, and Clemency

• GOP-Led Probe

  • House Oversight Committee alleges aides used an auto pen to issue executive actions—potentially without Biden’s sign-off.
  • "A Republican-led panel has recommended that the Justice Department investigate all of former President Joe Biden's executive actions, particularly his clemency decisions..." (Caitlin McCabe, 11:33)

• Administration Response

  • Biden’s spokesperson calls the inquiry “baseless” and urges Congress to move on.
  • "There was no conspiracy, no cover up and no wrongdoing. Congressional Republicans should stop focusing on political retribution and instead work to end the government shutdown..." (Caitlin McCabe, quoting Biden spokesperson, 11:53)

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Notable Quotes & Memorable Moments

• On Amazon's Dilemma:
  • "Amazon wants to cut spending from what they saw as a period of overexuberant growth, but at the same time find cash to spend on AI."
    — Sean McLean (01:50)
• On the Human Impact of Inflation:
  • "You're not earning as much anymore, and the money that you do earn doesn't go as far."
    — Conrad Puzier (05:48)
• On Rare Earths Investment Boom:
  • "It's really night and day. The industry has really struggled to raise cash for decades... And it's really changed these past few months in a lot of different ways."
    — John Emont (08:00)
• On Western Companies’ Reluctance:
  • "It's hard to imagine anything that really disrupts the momentum of new investment into the Western rare earth sector."
    — John Emont (10:59)

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Timestamps for Key Segments

• Amazon Layoffs Announcement & Analysis: 00:46 – 04:01
• Inflation and Wage Stagnation: 04:01 – 06:38
• Rare Earths Investment Boom: 08:00 – 11:25
• Biden Auto Pen Controversy: 11:33 – 12:20

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The episode delivers a thorough breakdown of Amazon’s shift in strategy, the broader corporate turn toward AI and efficiency, and the impacts of macroeconomic and geopolitical shifts—from inflation to strategic minerals and political dramas. The reporting balances technical business insights with the lived experience of everyday workers and companies.

Transcript

[Caitlin McCabe]

How does F1 turn data into insights at 200 mph? AWS is how fans get inside the strategy. AWS powers next level innovation for millions of businesses. Amazon plans sweeping layoffs across its corporate workforce as it continues to pivot toward AI. Plus how China's restrictions on rare earths have led to boom times for Western companies in the space.

[John Emont]

Western companies that really rely on Chinese rare earth magnets, they're going to want almost certainly another source. So it's hard to imagine anything that really disrupts the momentum of new investment into the Western rare earth sector.

[Caitlin McCabe]

And a Republican led panel takes aim at former President Joe Biden's executive actions and use of auto pen it's Tuesday, October 28th. I'm Caitlin McCabe for the Wall Street Journal and here is the AM edition of what's News, the top headlines and business stories moving your world foreign we start today with big news from Amazon, which according to people familiar with the matter, is planning to lay off as many as 30,000 employees, or roughly 10% of its corporate workforce. The cuts could begin as soon as today, but won't happen all this week. Human resources, cloud computing, advertising and a number of other business units are expected to be affected. The total number of reductions hasn't been finalized. Journal reporter Sean McLean says the cuts are significant and come as Amazon CEO Andy Jassy pushes ahead with a campaign to cut expenses after a period of aggressive hiring in the pandemic.

[Sean McLean]

It'll be one of the largest layoffs in the company's history and it underlines the pressure that large corporations, large tech companies, any big employer is having right now in the US So in Amazon's case, they are having to drastically ramp up the amount they're spending on AI, cloud computing, all these big ticket items to compete with the likes of Google, Microsoft and even Nvidia in the chips game. And at the same time, Amazon has been in a multi year effort to really trim back costs after having expanded rapidly during the pandemic. So it's two things going on. Amazon wants to cut spending from what they saw as a period of overexuberant growth, but at the same time find cash to spend on AI.

[Caitlin McCabe]

The move comes ahead of Amazon's quarterly results on Thursday. Sean says that like many companies at the moment, Amazon is eager to capitalize on AI as it seeks to do more with less.

[Sean McLean]

The broader context really is this period of uncertainty in corporate America where job growth is slowing, the economy is less certain, prices are going up, consumer sentiment is down, and then you have this sort of ebb and flow of the trade war. Where are prices going to go up because of tariffs? Are they going to stick for how long? And all of that has CEOs from the east coast to the west coast, Andy Jassy of Amazon being no exception, looking for ways to do more with less. And one of the key ways you're seeing is with AI. So you're seeing CEOs wanting workers to be more productive with AI tools. In the case of Amazon, both white collar and blue collar finding ways to have robots and AI tools enable headcount to either reduce or slow down in growth without hurting business growth. That's what's behind the move Now. Amazon's move is bolder than most. Amazon until the last couple years hadn't been known for these huge headline grabbing layoffs. And certainly this latest announcement seems to hit almost every corner of the business, at least on the white collar side.

[Caitlin McCabe]

There was a collective sigh of relief at the end of last week when inflation numbers finally arrived, reaching 3% in September. This still exceeds the Federal Reserve's 2% target, but comes in below economists earlier predictions. Now Fed Chair Jerome Powell is widely expected to cut short term interest rates by a quarter percentage point tomorrow. However, the Journal's economics reporter Conrad Puzier explains that while the current data may be welcomed by industry experts, there's still widespread concern among everyday Americans about rising prices.

[Conrad Puzier]

Two things have happened this year. On the one hand, inflation has not gone away, and if anything, inflation has picked up again. But that's not all. Inflation tends to be higher for middle and working class Americans because price increases have often been higher for cheaper goods. At least that's what economist Alberto Caballo at Harvard, who studies prices at major retailers, has found. And basically what's happened is that cheaper goods have lower profit margins. And what that means is if you put tariffs on those goods, often retailers have no choice other than to raise prices because otherwise they'd lose money. Whereas luxury goods, they have often massive profit margins. So retailers can just eat the tariffs. So what this means for working class and middle class Americans is that for many of them the real inflation rate that they feel is much higher than the overall 3% number. The other part of it is that wage growth has really come down for middle class, but especially for working class Americans, for people with lower income wages. And that's really a reversal to the way things were before the pandemic. So if you're a lower income American, your wages are not rising the way they did last couple years ago. But inflation hasn't gone away. So you're getting squeezed from two sides. You're not earning as much anymore, and the money that you do earn doesn't go as far.

[Caitlin McCabe]

Conrad says this persistent inflation from the surge back in 2022 and 2023 is a real sticking point for many Americans who were told by policymakers that price hikes were just temporary.

[Conrad Puzier]

Americans are upset. Americans are really mad about inflation. In 2022 and early 2023, we had this massive surge in inflation. And at the time, we were told by economists and policymakers, though, that this is a temporary thing and everything's going to go back to normal. And that's sort of true in that inflation has come down, but at the same time, inflation hasn't gone away and it's still way too high. So if you're an American now, you're realizing actually maybe you have to live with higher inflation for quite a while more recently because of tariffs. And that's upsetting.

[Caitlin McCabe]

Coming up, curious about America's hottest new investment. Turns out it's rare earths following China's tightening of restrictions on the industry this year. Plus, former President Joe Biden's time in office is back in the spotlight again. Those stories and more after the break. Trustage helps make annuities simple. Our flexible products and personalized support help you build stronger relationships and grow your business with confidence. Discover [e-mail] grow. TruStage is the marketing name for Trustage Financial Group Inc. Subsidiaries and affiliates. Corporate headquarters is located in Madison, Wisconsin. President Trump's tour across Asia continues today, building toward a highly anticipated meeting with Chinese leader Xi Jinping on Thursday. One of the topics they'll discuss, rare earths, which China has placed under tighter export controls amid trade tensions between both countries this year. But there has been a silver lining of sorts. China's shock tactics have catalyzed a revival of the Western critical minerals industry. Journal reporter John Emott says a wave of private and government funding has flowed into rare earth companies. John, thanks for being here. Can you walk us through the scale of investment that we're seeing right now?

[John Emont]

Yeah, I've been covering this for a couple of years now. It's really night and day. It's huge. The industry has really struggled to raise cash for decades because China just controls every part of the rare earth industry, from mining the rare earths to processing them to turning them into the magnets that go into things like automobiles and fighter jets. And they keep price is generally very, very low. And so that's just made it impossible for almost anyone else to compete. And as a result, investors have always been very squeamish to put their money into this sort of opaque industry where you'd have to compete with China. So even people who have promising ideas or promising projects in the west have typically been starved of funding. And it's really changed these past few months in a lot of different ways. So, one, governments are putting a lot more money into this. We've seen this with announcements from a big export bank that's affiliated with the United States government that put $2.2 billion into seven critical mineral projects in Australia. We've seen the US and Australian government recently commit separately to putting in over a billion dollars into critical mineral projects. JP Morgan has pledged to back some of these projects. And yesterday they released their first investment, which was 75 million dol, an antimony mine in Idaho. Antimony is not a rare earth, but it's a critical mineral. It's one of these other minerals that's been restricted by China. So that's a big sea change. And then we're also seeing private investors get really interested in this space at a retail level. The stock prices of all these companies have gone way, way up. There's just a lot of money flowing in.

[Caitlin McCabe]

Yeah, seems like there have been several publicly traded companies that have really benefited from this. I think Your story notes MP materials up more than 300% this year. I want to turn to this pivotal meeting between President Trump and Xi Jinping that we mentioned earlier. What do we expect to happen there in terms of rare earths this week? And if things go well, what does this mean for the situation happening in the west right now?

[John Emont]

What we expect, based on what Secretary of Treasury Scott Bessen has said, is that there's going to be likely some type of relaxation of the recent Chinese export controls put on rare earths, maybe some deferral. It's not clear whether that just means some of the more recent steps that China took in October, or if we're talking about a relaxation of new steps going back all the way to April, when the trade war began and China first put in place its new sort of very draconian rare earth export controls. Obviously, the United States government would seemingly like China to just do away with all of its controls and rare earths. But assuming that China doesn't do that, in general maintains this apparatus of requiring companies that want its magnets to apply for licenses, meaning it has the power to deny those licenses or delay them, then that's still a very scary prospect for Western companies. In other words, tweaks around the edges are not going to satisfy Western companies that really rely on Chinese rare earth magnets. They're going to want almost certainly another source, either as insurance or maybe just as their sole source. So it's hard to imagine anything that really disrupts the momentum of new investment into the Western railroad sector.

[Caitlin McCabe]

That's Journal reporter John Emont. John, thanks for joining us.

[John Emont]

Thanks for having me.

[Caitlin McCabe]

A Republican led panel has recommended that the Justice Department investigate all of former President Joe Biden's executive actions, particularly his clemency decisions, and determine whether he authorized them. The GOP led House Oversight Committee accused Biden staffers in a report yesterday of making executive decisions in his place toward the end of his presidency. The committee said aides failed to document that Biden himself had approved decisions before they used an auto pen. The auto pen, or devices that replicate signatures have long been used by presidents to handle a deluge of paperwork. President Trump has said auto pens shouldn't be used to sign important documents. Biden has previously denied that his aides used an auto pen to issue pardons and commutations without his approval. A Biden spokesperson said the claims of the investigation were baseless and that former President Biden made the decisions of his presidency, adding, quote, there was no conspiracy, no cover up and no wrongdoing. Congressional Republicans should stop focusing on political retribution and instead work to end the government shutdown, end quote. Legal scholars say there is no mechanism to undo clemency after it is granted. And that's it for what's News for this Tuesday morning. Heads up. We've got a special bonus episode coming for you later today. In the latest what's News in earnings, we dig into airlines financial reports to find out how they're thinking about pricing ahead of the busy holiday travel season. That'll be in the feed around midday. And we'll have the pm. What's news after that. Today's show is produced by Kate Bullivant. Our supervising producer was Michael Cosmides. And I'm Caitlin McCabe for the Wall Street Journal. Thanks for listening. The AI era promises rewards and introduces risks. Your employees will be more productive, but they may leak sensitive data. Your developers will stand up game changing new offerings, but your attackers are moving just as fast. Versa unifies networking and security into one intelligent platform, delivering an infrastructure that adapts and defends. Make AI safe for business yours. Learn more at versa-networks.com.