Amazon CEO Now Says AI Is Not Liable for Current Layoffs

Amazon simply posted its third-quarter earnings and it seems it was an exceptional quarter for the e-commerce big, regardless of current layoffs.

The corporate big raked in $180.2 billion in gross sales within the three months ending Sept. 30, up 13% from the identical interval final yr. Its cloud enterprise, AWS, reported its largest year-over-year progress since 2022, climbing 20% to $33 billion. The corporate’s inventory even popped 13% in after-hours buying and selling following the report.

So why, with the corporate performing so effectively, did Amazon simply slash 14,000 corporate jobs and hinted that extra cuts may very well be on the best way?

Happily for us, CEO Andy Jassy was requested to touch upon the layoffs in the course of the firm’s earnings name Thursday night. Nevertheless, he was fast to downplay any connection to AI.

“What I might inform you is, you realize, the announcement that we made just a few days in the past was probably not financially pushed, and it’s not even actually AI pushed, not proper now a minimum of,” Jassy instructed buyers. “It’s tradition.”

He went on to attempt to make the case that the corporate’s fast progress over the past a number of years added extra folks, layers, and complexity to its operations. This fast progress, in flip, slowed decision-making and weakened possession for staff on the frontlines.

Jassy mentioned Amazon is now dedicated to working just like the world’s largest startup with the intention to transfer extra rapidly throughout what he known as the main “know-how transformation taking place proper now.”

The memo despatched to laid-off staff earlier this week hit lots of the identical factors Jassy made. But it surely additionally immediately named the massive tech shift, AI, that he had been hinting at, whilst he claimed it wasn’t driving this spherical of layoffs.

“This era of AI is essentially the most transformative know-how we’ve seen because the Web, and it’s enabling corporations to innovate a lot quicker than ever earlier than (in present market segments and altogether new ones). We’re satisfied that we should be organized extra leanly, with fewer layers and extra possession, to maneuver as rapidly as potential for our clients and enterprise,” wrote Beth Galetti, senior vp of individuals expertise and know-how at Amazon, within the memo.

Nonetheless, these job cuts additionally come as Amazon, and the remainder of Silicon Valley, is seemingly betting all of it on AI.

Jassy mentioned on Thursday that the corporate’s AI and cloud infrastructure added greater than 3.8 gigawatts of energy capability previously 12 months and is predicted so as to add one other gigawatt this fourth quarter.

And future cuts might not be restricted to company staff. The New York Occasions reported final week that Amazon’s automation workforce expects that by 2027, the corporate might avoid hiring more than 160,000 U.S. workers it would normally need. General, Amazon’s robotics workforce has an final purpose to automate 75 p.c of the corporate’s operations, in response to inside paperwork obtained by The New York Occasions.