Amazon’s Job Cuts: What Employers Need To Know About Redundancies

As of today, Amazon has confirmed plans to reduce its global corporate workforce by approximately 14,000 (a potential reduction in workforce of 4%). The scale of the reported cuts is a timely reminder to UK employers on how to manage redundancies correctly.

Beth Galetti (a senior vice president at Amazon) has stated that the cuts are based on artificial intelligence and the impact it has had on the company. Amazon’s CEO has said AI tools will let the company operate with fewer people doing certain jobs, whilst creating demand for different roles. It’s a trend we’re seeing across industries, and it highlights why employers need to understand their legal obligations when restructuring their workforce.

Why proper procedures matter

Making people redundant isn’t just about business decisions. It’s also about following the requisite statutory procedure to protect both your business and your employees. Should an employer follow the wrong process, it could face defending expensive Employment Tribunal claims, with employees making collective claims for unfair dismissal and protective awards.

The key is understanding when collective consultation rules apply, what genuine individual consultation looks like, and how to avoid the pitfalls that lead to Employment Tribunal claims.

Collective redundancy obligations

When you’re making 20 or more people redundant at a single establishment within 90 days, you must follow collective consultation rules. This means:

Get this wrong and you could face protective awards of up to 90 days’ gross pay per affected employee. That’s a significant financial penalty on top of the obligatory statutory redundancy payment and notice pay.

Individual consultation requirements

For every employee facing redundancy – regardless of numbers – you need to undertake a genuine consultation process. This isn’t merely a tick-box exercise or a rubber-stamping of decisions already made.

You must explain why their role is at risk of redundancy, engage with their suggestions on ways to avoid redundancies, discuss what alternative roles exist (should the redundancy be confirmed), and give the employee sufficient time to respond to the proposals.

Employment Tribunals expect real dialogue between the employer and employee. If you’ve already decided the employee to be made redundant and the consultation process is a sham, an Employment Tribunal will likely find the dismissal unfair on procedural grounds.

Fair selection criteria

When choosing who is to be made redundant, your criteria must be objective and non-discriminatory. Common criteria include skills and qualifications, performance records, attendance, disciplinary history, and length of service.

However, you must be careful. Even objective-sounding criteria can indirectly discriminate. For example, using attendance records might disadvantage people with the protected characteristic of disability. Prioritising flexibility might also have a negative impact on employees with caring responsibilities. Careful thought and reasoning need to be given to the potential impact of selection criteria, so that your approach can be justified.

Your selection process should be thoroughly documented. Score employees against the objective criteria and keep records of your reasoning. Contemporaneous evidence becomes crucial if you face an Employment Tribunal claim for either unfair dismissal and/or discrimination.

The duty to find suitable alternative employment

Before confirming redundancies, you must genuinely look for alternative roles for the affected employees. This means checking for:

This duty continues throughout the notice period. If a suitable alternative vacancy comes up after you’ve issued notice of termination, it would be best practice to offer this to the employee.

When you offer an alternative role, the employee is entitled to a four-week trial period. If either party decides the role isn’t suitable for the employee during this time, the redundancy can be confirmed.

Understanding redundancy in the age of AI

Amazon’s situation shows how technological change creates legitimate business reasons for redundancies. When AI tools can automate tasks previously done by people, those roles may genuinely no longer be required. This falls within the legal definition of redundancy of a role that is no longer required in the business.

But having a valid and fair business reason for the dismissal of an employee/employees doesn’t mean an employer can forego a fair redundancy procedure. You still need to advise the employees that they are at risk of redundancy, consult with both employees individually and with the appropriate representatives, carry out a fair selection process, and consider suitable alternative employment.

If you’re implementing AI-driven changes, be transparent about what’s happening and why. Where technology eliminates certain roles but creates others, consideration should be given to retraining existing employees rather than making them redundant and recruiting externally for the new positions.

Statutory redundancy payments and notice pay

Employees with more than two years’ continuous service are entitled to statutory redundancy pay. The calculation is based on their age, length of service (capped at 20 years), and weekly gross pay (capped at £719).

Many employers offer enhanced redundancy packages, particularly for senior or long-serving employees. Enhanced terms can help smooth the dismissal process and reduce the risk of Employment Tribunal claims.

Also, don’t forget notice periods. Employees are entitled to their contractual notice or the statutory minimum, whichever is higher. The statutory minimum starts at one week for employees with one month to two years’ service, rising to one week for each year of service up to a maximum of 12 weeks.

During the employee’s notice period, they should be allowed reasonable paid time off to look for alternative work or arrange training for new employment.

Potential Employment Tribunal claims and how to avoid them

Unfair grounds for redundancy and unfair redundancy processes can lead to claims for:

The key to avoiding Employment Tribunal claims is planning ahead, following a fair procedure, documenting everything thoroughly, and treating employees with respect throughout. When employees feel the process has been fair and they’ve been treated decently, they’re far less likely to bring an Employment Tribunal claim.

Looking ahead

As AI continues to evolve, workforce restructuring will become more common across all sectors. The organisations that navigate these changes successfully are those that plan properly, follow fair procedures, and obtain expert legal advice early in the process.

Amazon’s planned cuts remind us that business efficiency must be balanced with legal obligations to employees. Whether you’re planning workforce changes or responding to them, proper procedures aren’t optional extras – they’re essential protection for your business.