Amazon Fires 30,000. Is AI to Blame?

Reuters reports that Amazon.com Inc. (NASDAQ: AMZN | AMZN Price Prediction), a giant in the AI industry, is about to lay off 15,000 corporate employees. That is on top of the 14,000 it let go last year, when Amazon management said artificial intelligence (AI) had made many of the jobs “redundant.” It is hard to see how the new layoffs are any different.

Reuters reports that the Seattle-based online retailer tied the October round of job cuts to the rise of AI software. It said in an internal letter that “this generation of AI is the most transformative technology we’ve seen since the Internet, and it’s enabling companies to innovate much faster than ever before.”

It makes sense that AI is one reason for the cuts. There are only a few companies at the top of the global AI pyramid. These include public companies Alphabet, Meta, Microsoft, and Nvidia. The private company leaders are OpenAI, xAI, and Anthropic. It is a furious race, fueled by costly Nvidia chips and hundreds of billions of dollars invested in massive data centers, some as large as New York City’s Central Park. At the core of this expansion lies what may be the most important question in tech history. Who will own the largest piece of the AI landscape, and which companies will find themselves left behind?

Major tech company layoffs have already started. AI is part of the reason, as Microsoft Corp. (NASDAQ: MSFT) says AI handles most of its low-level coding. “Microsoft CEO Satya Nadella … said that as much as 30% of the company’s code is now written by artificial intelligence,” according to CNBC.

Amazon and AI

Amazon has broadly hinted that AI will affect much of its total employee headcount in the next few years. The New York Times reported last year that management does not want to grow its U.S. workforce. However, the company planned to double the number of products it sells by 2033. “That would translate to more than 600,000 people whom Amazon didn’t need to hire,” the paper wrote. That is more people than the total workforce of FedEx, the fifth-largest employer in America.

There is debate about whether AI will eliminate jobs or create new ones. In the distant future, one side of the argument goes, no one will work. The counterargument is that rising productivity created by AI will cause the global workforce to grow. No matter which direction employment goes over time, Amazon appears to think that the “fewer employees” argument is the more powerful.

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