Amazon has laid off employees in its artificial general intelligence (AGI) organization as the technology giant refines its artificial intelligence strategy.
The move underscores how even the industry’s biggest AI investors are reallocating talent while committing unprecedented sums to AI infrastructure.
The company confirmed the job cuts on Wednesday but did not disclose how many employees were affected or identify the specific teams impacted within the AGI division. The unit is responsible for developing Amazon’s frontier AI models and also houses teams working on custom AI silicon and quantum computing, two technologies viewed as critical to the company’s long-term AI ambitions.
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The restructuring comes as Amazon balances aggressive investment in AI with continued efforts to streamline operations following years of workforce reductions.
“This is a fast-moving space, and we’re sharpening our focus on the initiatives that matter most for customers, so we can move faster on what counts,” an Amazon spokesperson said in a statement.
“That focus means some difficult decisions, including eliminating some roles within parts of our AGI organization, even as we continue to invest in the areas most important to our customers’ future.”
Reuters first reported the layoffs.
The latest reductions suggest that AI spending does not necessarily translate into broad-based hiring. Instead, major technology companies are increasingly reallocating resources toward projects with the greatest commercial potential, trimming overlapping teams while expanding investment in core infrastructure, advanced models and specialized engineering talent.
Amazon has been engaged in a multiyear cost-cutting effort since the post-pandemic slowdown prompted large technology companies to reassess their workforce needs. Since late 2022, the company has eliminated more than 30,000 jobs across multiple divisions, including devices, cloud computing, advertising, communications and entertainment. Smaller rounds of layoffs have continued throughout 2026 as Amazon seeks to improve operating efficiency while redirecting capital toward AI.
The AGI division sits at the center of Amazon’s strategy to compete with industry leaders such as OpenAI, Anthropic and Google in the race to build increasingly capable foundation models. Artificial general intelligence generally refers to AI systems capable of matching or surpassing human performance across a broad range of cognitive tasks, though no company has yet achieved that milestone.
Amazon entered the frontier model race later than some rivals but has accelerated development over the past two years. In 2024, the AGI organization introduced its Nova family of foundation models, designed to support enterprise customers through Amazon Web Services and power generative AI applications across Amazon’s businesses.
The unit underwent a major leadership overhaul last December when Amazon appointed longtime AWS executive Peter DeSantis to lead the organization, replacing Rohit Prasad. The leadership change signaled Amazon’s intention to integrate AI model development more closely with its cloud infrastructure strategy and accelerate commercialization of its AI technologies.
The organization has also experienced executive turnover. In February, David Luan, who headed Amazon’s AGI lab after joining through the acquisition of startup Adept in 2024, left the company, raising questions about leadership continuity as Amazon pushes to narrow the gap with more established AI competitors.
Despite the layoffs, Amazon said AI remains one of its highest strategic priorities. The company has been building large AI models for several years, and “it remains one of the most important things we’re working on,” the spokesperson said.
DeSantis acknowledged in an interview with CNBC last month that Amazon still trails the industry’s most advanced AI developers in certain frontier capabilities.
“Our models haven’t been at the very frontier for the very largest, most demanding workloads,” he said, adding that Amazon is working to strengthen its model portfolio with the goal of developing one of the “most capable intelligent models out there.”
He thus confirmed Amazon’s recognition that while it possesses one of the world’s largest cloud computing platforms and extensive AI infrastructure, it has yet to establish the same reputation for cutting-edge foundation models enjoyed by competitors including OpenAI, Anthropic and Google.
Amazon’s plan centers on leveraging its unique competitive advantages rather than competing solely on model performance. Through AWS, the company offers customers access to multiple third-party models, including Anthropic’s Claude family, alongside its own Nova models, allowing enterprises to choose among different AI systems while keeping workloads within Amazon’s cloud ecosystem.
The workforce reductions come as Amazon prepares to report second-quarter earnings next week, when investors are expected to closely scrutinize AI-related spending, cloud growth and returns on the company’s massive capital investments.
Amazon has projected capital expenditures of approximately $200 billion this year, representing an increase of more than 50% from 2025. The spending will primarily fund AI data centers, custom Trainium and Inferentia chips, networking infrastructure and expanded cloud capacity required to train and deploy increasingly sophisticated AI models.
To support those investments, Amazon has also raised tens of billions of dollars through debt markets, joining Microsoft, Alphabet and Meta in making record capital commitments to artificial intelligence.