Amazon CEO Now Says AI Is Not Answerable for Current Layoffs

Amazon simply posted its third-quarter earnings and it seems it was an outstanding quarter for the e-commerce large, regardless of current 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 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 properly, did Amazon simply slash 14,000 corporate jobs and hinted that extra cuts might be on the way in which?

Luckily 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 understand, the announcement that we made just a few days in the past was not likely 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 stated Amazon is now dedicated to working just like the world’s largest startup with the intention to transfer extra shortly throughout what he referred to as the main “know-how transformation occurring 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 large 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 for the reason that Web, and it’s enabling firms 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 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 stated on Thursday that the corporate’s AI and cloud infrastructure added greater than 3.8 gigawatts of energy capability prior to now 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 staff expects that by 2027, the corporate may avoid hiring more than 160,000 U.S. workers it would normally need. General, Amazon’s robotics staff has an final purpose to automate 75 p.c of the corporate’s operations, in line with inner paperwork obtained by The New York Occasions.