MS, Amazon, and P&G Begin Layoffs
"30 to 40 Percent of Teams Are Unnecessary"
Major U.S. companies are rushing to reduce their workforce. Microsoft (MS), which laid off 6,000 employees last month, is reportedly planning to cut thousands more jobs next month. Andy Jassy, CEO of Amazon, has predicted that the number of employees will decrease in the coming years as the use of artificial intelligence (AI) increases. While the prevailing view among U.S. companies was once that acquiring talent was the foundation for future growth, there is now analysis suggesting that the opinion that fewer employees lead to faster growth is gaining traction.
According to Live Data Technologies, an employment data provider, on June 18 (local time), publicly traded U.S. companies have reduced their office workforce by a total of 3.5% over the past three years. Over the past decade, one in five S&P 500 companies has implemented layoffs.
Layoffs have recently become active not only among big tech companies such as MS and Amazon but also in other sectors. Procter & Gamble (P&G) announced that it would cut 7,000 non-manufacturing employees, equivalent to 15% of that workforce, in order to create broader roles and smaller teams. Est?e Lauder and dating app operator Match Group recently stated that they each laid off about 20% of their managers.
The Wall Street Journal (WSJ) pointed out that this trend reflects a change in corporate management philosophy, going beyond simple cost-cutting. The introduction of generative AI has enabled companies to accomplish more with fewer resources. However, the trend signifies more than just the adoption of AI. The outlet reported, "There is a growing perception in companies both large and small that having too many employees is becoming an obstacle."
Traditionally, companies would lay off employees during economic downturns and rehire when the economy recovered. However, this trend has been changing in recent years. According to the Federal Reserve Bank of St. Louis, U.S. corporate profits reached an all-time high at the end of last year. Despite strong performance, companies are still conducting layoffs.
Jason Lemkin, a technology investor and former Adobe executive, said on a venture capital podcast last month, "Everyone with more than 500 employees, especially public companies, is saying that 30 to 40% of their teams are unnecessary."
When Brian Moynihan became CEO of Bank of America (BoA) in 2010, the company had 285,000 employees. Since then, BoA has closed branches and digitized more processes, reducing its workforce to 213,000 and its executive team from 13 to 7 members. Revenue has increased by 18% compared to ten years ago. In April, CEO Moynihan told investors, "We have built a company that delivers higher productivity with fewer employees and lower costs."
According to Live Data Technologies, from May 2022 to May 2025, the number of managers at listed companies fell by 6.1%, while the number of executives decreased by 4.6%. According to HR software provider Lattice, in 2020, managers had an average of 4.2 direct reports, but by 2023, that number had risen to 5.1.
Joseph Fuller, a professor of management at Harvard Business School, pointed out that this trend could have adverse effects and decrease employee productivity.
In particular, the adoption of generative AI is accelerating layoffs. The CEOs of e-commerce platform Shopify and language learning app Duolingo recently told employees that new hires would only be possible if they could prove their jobs could not be automated.
Walmart deployed AI agents to reduce in-house apparel production times by up to 18 weeks. According to disclosure documents, Walmart recorded $681 billion in revenue in 2024, a 40% increase compared to ten years ago. However, compared to ten years ago, the number of employees has decreased by 100,000.
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