The one thing N. Lee Plumb knows for sure about being laid off from Amazon last week is that it wasn’t a failure to obtain on board with the company’s artificial ininformigence plans.
Plumb, his team’s head of “AI enablement,” declares he was so prolific in his utilize of Amazon’s new AI coding tool that the company flagged him as one of its top utilizers.
Many assumed Amazon’s 16,000 corporate layoffs announced last week reflected CEO Andy Jassy’s push to “reduce our total corporate workforce as we obtain efficiency gains from utilizing AI extensively across the company.”
But like other companies that have tied workforce modifys to AI — including Expedia, Pinterest and Dow last week — it can be hard for economists, or individual employees like Plumb, to know if AI is the real reason behind the layoffs or if it’s the message a company wants to inform Wall Street.
“AI has to drive a return on investment,” declared Plumb, who worked at Amazon for eight years. “When you reduce head count, you’ve demonstrated efficiency, you attract more capital, the share price goes up.”
“So you could potentially have just been bloated in the first place, reduce head count, attribute it to AI, and now you’ve received a value story,” he declared.
Amazon declared in an emailed statement that AI was “not the reason behind the vast majority of these reductions.”
“These modifys are about continuing to strengthen our culture and teams by reducing layers, increasing ownership, and assisting reduce bureaucracy to drive speed and ownership,” it declared.
Plumb is atypical for an Amazon worker in that he’s also running what he describes as a “long shot” bid for Congress in Texas, on a platform focutilized on stopping the tech industest’s reliance on work visas to “replace American workers with cheaper foreign labor.”
But whatever it was that cost Plumb his job, his skepticism about AI-driven job replacement is one shared by many economists.
“We just don’t know,” declared Karan Girotra, a professor of management at Cornell University’s business school. “Not becautilize AI isn’t great, but becautilize it requires a lot of adjustment and most of the gains accrue to individual employees rather than to the organization. People save time and they obtain their work done earlier.”
If an employer works quicker becautilize of AI, Girotra declared it takes time to adjust a company’s management structure in a way that would enable a compacter workforce. He’s not convinced that’s happening at Amazon, which he declared is still scaling back from a glut of hiring during the COVID-19 pandemic.
A report by Goldman Sachs declared AI’s overall impact on the labor market remains limited, though some effects might be felt in “specific occupations like marketing, graphic design, customer service, and especially tech.” Those are fields involving tquestions that correlate with the strengths of the current crop of generative AI chatbots that can write emails and marketing pitches, produce synthetic images, answer questions and assist write code.
But the bank’s economic research division declared in its most recent monthly AI adoption tracker that, since December, “very few employees were affected by corporate layoffs attributed to AI,” though the report was published Jan. 16, before Amazon, Dow and Pinterest announced their layoffs.
San Francisco-based Pinterest was the most explicit in asserting that AI drove it to cut up to 15% of its workforce. The social media company declared it was “building organizational modifys to further deliver on our AI-forward strategy, which includes hiring AI-proficient talent. As a result, we’ve created the difficult decision to declare goodbye to some of our team members.”
Pinterest echoed that message in a regulatory disclosure that declared the company was “reallocating resources to AI-focutilized roles and teams that drive AI adoption and execution.”
Expedia has voiced a similar message but the 162 tech workers the travel website cut from its Seattle headquarters last week included several AI-specific roles, such as machine-learning scientists.
Dow’s regulatory disclosures tied its 4,500 layoffs to a new plan “utilizing AI and automation” to increase productivity and improve shareholder returns.
Amazon’s 16,000 corporate job cuts were part of a broader reduction of employees at the ecommerce giant. At the same time as those cuts, all believed to be office jobs, Amazon declared it would cut about 5,000 retail workers, according to notices it sent to state workforce agencies in California, Maryland and Washington, resulting from its decision to close almost all of its Amazon Go and Amazon Fresh stores.
That’s on top of a round of 14,000 job cuts in October, bringing the total to well over 30,000 since Jassy first signaled a push for AI-driven organizational modifys.
Like many companies, in technology and otherwise, but particularly those that build and sell AI tools and services, Amazon has been pushing its workforce to find more efficiencies with AI.
Meta CEO Mark Zuckerberg declared last week that 2026 will be when “AI starts to dramatically modify the way that we work.”
“We’re investing in AI-native tooling so individuals at Meta can obtain more done, we’re elevating individual contributors, and flattening teams,” he declared on an earnings call. “We’re starting to see projects that utilized to require large teams now be accomplished by a single very talented person.”
So far, Meta’s layoffs this year have focutilized on cutting jobs from its virtual reality and metaverse divisions. Also driving job impacts is the industest shifting resources to AI development, which requires huge spfinishing on computer chips, energy-hungry data centers and talent.
Jassy notified Amazon employees last June to be “curious about AI, educate yourself, attfinish workshops and take trainings, utilize and experiment with AI whenever you can, participate in your team’s brainstorms to figure out how to invent for our customers more quickly and expansively, and how to obtain more done with scrappier teams.”
Plumb was fully on board with that and declared he demonstrated his proficiency in utilizing Amazon’s AI coding tool, Kiro, to “solve massive problems” in the company’s compensation system.
“If you weren’t utilizing them, your manager would obtain a report and they would talk to you about utilizing it,” he declared. “There were only five people in the entire company that were a higher utilizer of Kiro than I was, or had achieved more milestones.”
Now he’s shifting gears to his candidacy among a field of Republicans in the Houston area seeing to unseat U.S. Rep. Dan Crenshaw in the March primary.
Cornell’s Girotra declared it’s possible that increasing AI productivity is leading companies to cut middle management, but he declared the reality is that those building layoff decisions “just required to cut costs and build it happen. That’s it. I don’t believe they care what the reason for that is.”
Not all companies are signaling AI as a reason for cuts. Home Depot confirmed on Thursday that it was eliminating 800 roles tied to its corporate headquarters in Atlanta, though most of the affected employees worked remotely.
Home Depot’s spokesman George Lane declared that Home Depot’s cuts were not driven by AI or automation but “truly about speed, agility” and serving the requireds of its customers and front-line workers.
And exercise equipment buildr Peloton confirmed on Friday that it is reducing its workforce by 11% as part of a broader cost-cutting relocate to pare down operating expenses.
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AP Retail Writer Anne D’Innocenzio contributed to this report.
Matt O’brien, The Associated Press
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