(The Center Square) – Amazon is laying off 2,303 Washington-based employees, with 1,887 in Seattle alone. It’s a move projected to deal a multimillion-dollar blow to the city’s tax revenues.
The e-commerce giant announced 14,000 corporate jobs cut on Tuesday as the retailer invests in artificial intelligence. The layoffs are part of a broader strategy that could eliminate 30,000 positions, or roughly 10% of corporate staff.
According to Seattle Chief Economist Jan Duras, the 2,303 cuts to Washington-based Amazon employees will directly erode revenues from the city’s JumpStart Payroll Expense Tax – often referred to as the “Amazon Tax” – due to it targeting larger Seattle-based companies like Amazon, Meta and Google. The tax, which ranges from 0.75% to 2.5% tax on companies with at least $8.5 million in local payroll, hits Amazon at the full 2.5% rate.
State filings show 1,887 of the cuts are in Seattle offices. A Business Insider article reports that 78% of the 14,000 cuts were mid-to-senior level corporate managers in the retail division. A rough estimate of the lost payroll expense tax revenue resulting from this layoff is between $6 million and $12.1 million.
The Office of Economic and Revenues Forecast’s most recent forecast predicts the payroll expense tax to generate $392.7 million in 2026 as part of a baseline scenario. A pessimistic scenario drops that down to $359.4 million.
The layoffs will also indirectly affect sales tax revenue in Seattle, as Duras pointed out the upcoming start of the holiday sales season is important for overall sales tax collection.
“The affected employees will spend less, but even those employees that have not been laid off will likely cut back on spending, limit big ticket purchases and discretionary spending on goods and services,” Duras emailed The Center Square.
The Office of Economic and Revenues Forecasts’ most recent prediction anticipates a total of $344.4 million for 2025 and an increase to $401.9 million in 2026, mainly driven by a recently-approved 0.1% sales tax increase.
Seattle city leaders, including Mayor Bruce Harrell, have voiced concerns about Amazon relocating thousands of jobs from Seattle offices to its expanding campus in nearby Bellevue. While some jobs are being moved from older Seattle buildings to new Bellevue towers, the company’s overall headcount in Seattle has decreased due to both relocations and recent layoffs, as part of the retail giant’s long-term strategy to consolidate its regional growth in Bellevue. Out of the 2,303 Washington-based layoffs, approximately 284 come from Bellevue offices.
Seattle Office of Economic Development Director Markham McIntyre said the layoffs are tough for the local economy and impacted workers. The Seattle-King County Workforce Development Council has been holding rapid response workshops for laid off workers to help connect them to resources and services.
“We will continue to explore ways that local government can help these talented workers transition successfully into new opportunities,” McIntrye said in a statement emailed to The Center Square.
