Product management news: Amazon cuts 14,000 corporate jobs, OpenAI set for an IPO

From swingeing job cuts at Amazon to concerns that big tech is overspending on AI, here’s the news that caught our attention this week.

Amazon cuts 14,000 corporate jobs

Amazon is to cut about 14,000 corporate jobs, saying it needs to be organised “more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business”.

A note to Amazon employees from SVP Beth Galetti said Amazon expects to continue hiring in key strategic areas while also finding additional areas to remove management layers, increase ownership, and realise efficiency gains. She reiterated Amazon's ambition to operate like the world’s largest startup. This means having the right structure to be able to innovate quickly. She said AI was “the most transformative technology we’ve seen since the Internet”, and means companies can innovate faster than ever before.

The company has drawn criticism in the wake of the announcement. Some analysts have suggested that AI is not yet capable of replacing the middle-management roles that are most affected by the job cuts, saying that AI provides management with cover to justify preemptive layoffs and boost profit margins.

Netflix launches redesigned kids profile

Netflix has introduced a redesigned Kids profile, typically for children under 12, which uses a simplified UI, and curates only age-appropriate content. Parental control tools, such as setting maturity-ratings, locking profiles with PINs, turning off autoplay, and blocking specific titles, are included. According to TechCrunch: “The new design simplifies the look and feel of the homepage. It also offers a new navigation bar at the top that links to “My Netflix,” a section that brings together everything kids have watched, saved, and loved in a single place.”,

OpenAI set for $1 trillion IPO next year

Reuters reports that OpenAI is laying the groundwork for an IPO in the US potentially in late 2026, which could value the company at $1 trillion.

The company’s restructuring has just been completed, and it has struck a new deal with long-term backer Microsoft.  OpenAI’s for-profit arm is now a public benefit corporation, the OpenAI Group PBC. The nonprofit is now called the OpenAI Foundation and “holds equity in the for-profit currently valued at approximately $130 billion”, according to the company. The new deal means that Microsoft now owns about 27% of OpenAI’s PBC, whereas it previously held a 32.5%.stake in the business. An IPO would deliver lots of benefits to OpenAI - including significant capital to meet AI infrastructure costs and to fuel growth, and reward to early backers and employees. 

Is big tech overspending on AI?

A few articles this week have looked at the growing debate among analysts and investors that big tech may be overspending on AI infrastructure.

The Financial Times reports that Google, Meta and Microsoft spent almost $80 billion over the last quarter on artificial intelligence infrastructure, adding that investors have had “markedly different reactions to their plans to increase this historic spending spree”. Alphabet’s share price went up after it added $8 billion to its capex plans for 2025, while Meta’s share price dropped 9% when it indicated its spending on AI could exceed $100 billion next year. “Investors are worried that the rush to grab market leadership may cause an overshoot,” Dec Mullarkey, managing director of asset manager SLC Management told the FT. 

There’s plenty of evidence to prompt concern about AI overspend among analysts and investors, as the following shows:

• Collectively, Microsoft, Google, Amazon, and Meta are projected to spend over $200 billion on AI infrastructure in 2025. 
• Goldman Sachs and Alliance Bernstein have both recently published reports that examine whether AI is a bubble and if it is likely to burst. 
• Many AI products - like search assistants and AI chat features - are expensive to train and operate but don’t yet generate much revenue, with Gartner noting  that for many software companies, adding generative AI features has been more of a "tax" than a revenue driver for many software companies, with the revenue flowing back to the AI model providers 
• They also point out that Meta’s fundamental business is selling ads and that its quest to dominate advanced AI is disconnected from this.