Amazon CEO Now Says AI Is Not Chargeable for Latest 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 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?

Luckily 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 let you know is, you recognize, the announcement that we made a couple of days in the past was probably not financially pushed, and it’s not even actually AI pushed, not proper now a minimum of,” Jassy advised traders. “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 individuals, layers, and complexity to its operations. This fast progress, 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 known as the most important “expertise transformation occurring proper now.”

The memo despatched to laid-off workers earlier this week hit a variety of the identical factors Jassy made. Nevertheless it additionally immediately named the massive tech shift, AI, that he had been hinting at, at the same time as he claimed it wasn’t driving this spherical of layoffs.

“This era of AI is essentially the most transformative expertise 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 doable for our prospects and enterprise,” wrote Beth Galetti, senior vice chairman 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 prior to now 12 months and is anticipated so as to add one other gigawatt this fourth quarter.

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