Amazon CEO Now Says AI Is Not Responsible for Recent Layoffs

Amazon just posted its third-quarter earnings, and it turns out to be an exceptional quarter for the e-commerce giant, despite the recent layoffs.

The giant company achieved sales of $180.2 billion in the three months ending September 30, an increase of 13% over the same period last year. Its cloud business, AWS, posted its biggest year-over-year growth since 2022, rising 20% ​​to $33 billion. The company’s shares even rose 13% in after-hours trading following the report.

So why, with the company doing so well, did Amazon cut 14,000 jobs at the company and hint that more cuts might be on the way?

Fortunately for us, CEO Andy Jassy was asked to comment on the layoffs during the company’s earnings call Thursday night. However, he was quick to downplay any connection to artificial intelligence.

“What I would tell you is, you know, the announcement that we made a few days ago wasn’t really financially driven, and it wasn’t really AI driven, at least not right now,” Jassy told investors. “It’s the culture.”

He goes on to try to prove that the company’s rapid growth over the past several years has added more people, layers, and complexity to its operations. This rapid growth, in turn, slowed decision-making and weakened ownership of front-line workers.

Jassy said Amazon is now committed to acting as the world’s largest startup in order to move more quickly through what he called “the great technological shift that is happening right now.”

The memo sent to laid-off employees earlier this week addressed many of the same points Jassy made. But he also gave a direct name to the big technological shift, artificial intelligence, that he was alluding to, even as he claimed he wasn’t leading this round of layoffs.

“This generation of AI is the most transformative technology we have seen since the Internet, and it is enabling companies to innovate much faster than ever before (in existing market segments and entirely new ones). We are convinced that we need to organize more agilely, with fewer layers and more ownership, to move as quickly as possible for our customers and our businesses,” Beth Galletti, senior vice president of People and Technology Experience at Amazon, wrote in the memo.

However, these job cuts also come at a time when Amazon, and the rest of Silicon Valley, appears to be betting everything on AI.

The company’s artificial intelligence and cloud infrastructure has added more than 3.8 gigawatts of power capacity over the past 12 months and is expected to add another gigawatt in the fourth quarter, Jassy said Thursday.

Future cuts may not be limited to corporate workers. The New York Times reported last week that Amazon’s automation team expects that by 2027, the company could avoid hiring more than the 160,000 American workers it typically needs. Overall, Amazon’s robotics team has an ultimate goal of automating 75 percent of the company’s operations, according to internal documents obtained by The New York Times.