Amazon profits hit a new high but cuts 16,000 employees, Amazon launches AI gamble "Dawn Project"

Amazon announced the same day as hitting a record high in profits that it will cut 16,000 jobs, a key signal that the tech industry is accelerating the replacement of human labor with AI.
(Background: Three years since ChatGPT’s debut: The end of the large model war, where is the true moat?)
(Additional context: NVIDIA, Microsoft, and Amazon will invest $60 billion in OpenAI, with a valuation of $730 billion, as the AI arms race heats up.)

Table of Contents

• Profits hit a new high but layoffs continue, official statements and external interpretations
• Expanding AI replacement scope, talent structure shows gaps
• Potential impacts on the labor market and investors
• Key points for future observation

On the 28th, Amazon announced its Q4 2025 financial results: net profit of $21 billion, an increase of over 50% compared to the same period last year. However, on the same day, the company confirmed a restructuring plan called Project Dawn, which will cut approximately 16,000 corporate positions worldwide. Including the previous round of optimization launched in October 2025, the total reduction in workforce has approached 30,000 people.

Profits hit a new high but layoffs continue, official statements and external interpretations

According to Reuters, after internal emails from AWS leaked, CEO Andy Jassy and HR chief Beth Galetti explained to employees that the layoffs aim to “flatten the organization and improve decision-making efficiency.” However, KOMO News’s analysis pointed out that this adjustment is directly linked to generative AI projects, with some middle management and application development roles already replaced by automation tools.

The affected personnel are not limited to headquarters white-collar workers. The Alexa division, cloud infrastructure, and long-term investment physical retail businesses are also on the list. The company confirmed on the same day that it will close the remaining Fresh and Go unmanned stores and disable the Amazon One palm payment system, reflecting a capital allocation shift toward cloud computing and AI R&D.

Expanding AI replacement scope, talent structure shows gaps

Clues can also be seen from publicly posted job openings. Last week, Amazon listed over 2,000 new positions related to machine learning and model training, mainly at senior engineer and scientist levels. During the earnings call, the company stated that AI workloads have driven AWS revenue to grow 27% annually over the past three quarters, indicating that “computing power costs” have become a major investment focus.

Compared to the large number of marketing, project management, and general software maintenance roles being cut, external observers generally believe Amazon is converting human labor costs into capital expenditure on computing; this aligns closely with the multiple rounds of restructuring announced by Meta and Microsoft since 2024.

Potential impacts on the labor market and investors

In the short term, the company’s gross margin will further increase due to reduced personnel expenses, which has already caused Amazon’s stock price to rise more than 4% after hours. In the medium term, if AI efficiency improvements can sustain current profit growth, the market may reevaluate valuation models for large tech stocks: higher R&D spending could instead signal greater revenue expansion potential.

For the labor market, the signals are more direct. When a leading company with record profits still chooses to cut management and support roles, it indicates that the relationship between “profitability” and “demand for human resources” is weakening.

Analysts estimate that growth in tech-related job openings in the US will focus on cloud infrastructure and AI model engineering, while general white-collar positions face structural contraction. This is not good news for the future labor market.

Key points for future observation

First, whether AWS can maintain over 25% revenue growth throughout 2026 is a key indicator of the success of this restructuring.
Second, whether generative AI can significantly reduce operating expenses will directly influence whether other tech companies follow with more aggressive layoffs.
Third, the labor policies and antitrust stance of the Trump administration toward large tech firms may also influence their actions.

Based on current information, Amazon’s continued large-scale layoffs at a profit peak mark a new cycle of “efficiency first” in Silicon Valley. Both investors and job seekers need to reassess the role of “human resources” in the corporate value chain.