Amazon Is Cutting Jobs. Why That’s a Strong Sign for the AI Boom.

Make room for the robots. Amazon.com says it will cut around 14,000 employees in another sign of Big Tech’s determination to push ahead with artificial-intelligence investment, as the sector deals with funding and infrastructure challenges.

Amazon’s layoffs are equivalent to around 4% of its corporate workforce. That’s not unprecedented for the e-commerce company—it implemented a larger reduction back in late 2022. But the cuts make room for more spending on AI and follow through on CEO Andy Jassy’s claim the technology will enable Amazon to permanently reduce its workforce.

The company hinted at more cuts to come as it talked of finding “additional places to remove layers” in 2026, in a memo to employees Tuesday.

Coming ahead of Amazon’s earnings report on Thursday, the signal is the company will do whatever it takes to enable further AI investment. And it’s not alone. Alphabet’s Google is helping reopen a nuclear plant in Iowa in order to power its data centers. That comes as ChatGPT-developer OpenAI calls for the U.S. to build 100 gigawatts a year of new energy capacity, nearly double the level in 2024.

Other bottlenecks are also being addressed. Qualcomm is entering the AI server game and while its technology is unlikely to be a match for Nvidia’s most advanced systems, it adds another option for companies hoping to bring down computing costs. Investors are still keen on AI hardware, pushing up Qualcomm’s stock 11% on Monday.

It’s hard to see an AI bubble bursting this earnings season. Capital expenditure by the major cloud-computing companies is set to rise more than 50% this year, according to analysts’ forecasts. Perhaps the major test comes next year, when that rate of growth is expected to fall below 20% and the pressure will be on for evidence of return on investment.

Cutting thousands of workers in the run up to Christmas might not exactly be in the holiday spirit. But if it delivers the gift of more AI investment, Wall Street will be grateful.

—Adam Clark

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Amazon Is Cutting 14,000 Corporate Jobs, Warns of More to Come

Amazon said on Tuesday is will reduce its corporate workforce by about 14,000 roles, according to an internal memo shared with employees. The e-commerce and cloud-computing giant is bidding to build up its cash pile so it can plow even more money into artificial intelligence.

• The tech company announced the thousands of corporate pink slips and more to come in 2026. The Wall Street Journal reported on Monday that the cuts would be targeted across teams including human resources, cloud computing, advertising, and other business groups.
• “We expect to continue hiring in key strategic areas while also finding additional places we can remove layers, increase ownership, and realize efficiency gains,” Beth Galetti, senior vice president of People Experience and Technology at Amazon, said in the memo announcing the reduction.
• Galetti added that AI was “enabling companies to innovate much faster than ever before.” CEO Andy Jassy said in a note to employees in June that AI would likely “reduce our total corporate workforce.”
• Shares closed 1.2% higher on Monday, and were climbing again ahead of Tuesday’s opening bell. They have risen just 3.5% this year, lagging the S&P 500 as well as other tech giants like Microsoft, Nvidia, and Google owner Alphabet, which have soared amid a surge in interest in AI.

What’s Next: The next big moment for Amazon stock is likely to come after Thursday’s close, when the company is set to report its third-quarter earnings. Analysts are expecting earnings of $1.57 a share on sales of $177.9 billion, according to a FactSet poll, which would mean sales rose 12% from a year ago.

—Anita Hamilton, Adam Clark and George Glover

Qualcomm Elbows Itself Into the AI Computing Race

Qualcomm has introduced artificial intelligence accelerator chips, putting it in competition with AI chip giant Nvidia and rival Advanced Micro Devices. Before now, Qualcomm focused on making chips for mobile devices, but it will start delivering the new rack servers next year.

• The new servers will incorporate AI accelerator cards using Qualcomm’s Hexagon NPU technology that can support up to 768 gigabytes of memory. The memory architecture design will deliver higher memory bandwidth and lower power consumption than prior generations.
• Qualcomm is focusing its rack server products for AI inference workloads, the process of generating answers from already developed AI models, not the AI model training market Nvidia dominates.
• Senior Vice President Durga Malladi told The Wall Street Journal that the processors represent the natural evolution of its product line. After developing device-based chips, Qualcomm wants to scale up capabilities for AI data centers. With “extremely high memory bandwidth and extremely low power consumption,” they offer “the best of both worlds.”
• Qualcomm said HUMAIN, an AI company founded by Saudi Arabia’s sovereign Public Investment Fund, plans to deploy 200 megawatts of Qualcomm’s AI AI200 and AI250 rack solutions at Saudi data centers and around the world starting next year.

What’s Next: Qualcomm said the AI200 will be available next year, and the AI250 will come out in 2027. Both will be available as stand-alone components or as cards that can be added into existing machines.