Amazon CEO Now Says AI Is Not Chargeable for Current Layoffs

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

The corporate large raked in $180.2 billion in gross sales within the three months ending Sept. 30, up 13% from the identical interval final 12 months. Its cloud enterprise, AWS, reported its largest year-over-year development 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 nicely, did Amazon simply slash 14,000 corporate jobs and hinted that extra cuts might be on the way in which?

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

“What I’d inform you is, you already know, 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 informed traders. “It’s tradition.”

He went on to attempt to make the case that the corporate’s speedy development during the last a number of years added extra individuals, layers, and complexity to its operations. This fast development, in flip, slowed decision-making and weakened possession for employees on the frontlines.

Jassy mentioned Amazon is now dedicated to working just like the world’s largest startup so as to transfer extra shortly throughout what he referred to as the most important “expertise transformation taking place proper now.”

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

“This technology of AI is essentially the most transformative expertise we’ve seen for the reason that Web, and it’s enabling corporations to innovate a lot sooner than ever earlier than (in present market segments and altogether new ones). We’re satisfied that we have to be organized extra leanly, with fewer layers and extra possession, to maneuver as shortly as attainable for our clients and enterprise,” wrote Beth Galetti, senior vp of individuals expertise and expertise 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 is probably not restricted to company employees. The New York Instances 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. Total, Amazon’s robotics workforce has an final aim to automate 75 % of the corporate’s operations, based on inside paperwork obtained by The New York Instances.