Did artificial intelligence really drive layoffs at Amazon and other firms? It can be hard to tell

By MATT O’BRIEN The Related Press

The one factor N. Lee Plumb is aware of for positive about his dismissal from Amazon final week is that it wasn’t a failure to work on the corporate’s synthetic intelligence plans.

Plumb, his crew’s head of AI enablement, says he was so productive in his use of Amazon’s new AI coding instrument that the corporate named him considered one of its high customers.

Many assumed Amazon’s 16,000 companies announced layoffs Final week mirrored CEO Andy Jassy’s push to “cut back our total workforce as we drive efficiencies by utilizing AI at scale throughout the enterprise.”

However like different corporations which have linked workforce adjustments to AI, together with Expedia, Pinterest And Dow final week — it may be troublesome for economists, or particular person staff like Plumb, to know whether or not AI is the true cause behind the layoffs or if it is the message an organization needs to inform Wall Road.

“AI must generate a return on funding,” says Plumb, who labored at Amazon for eight years. “In case you cut back headcount, you could have demonstrated effectivity, you entice extra capital and the inventory worth goes up.”

“So you may have perhaps simply blown it up within the first place, decreased headcount, attributed it to AI, and now you could have a worth story,” he mentioned.

Plumb is atypical for an Amazon employee as a result of he’s additionally making a bid he describes as a “lengthy shot” for Congress in Texas, on a platform that focuses on ending the tech business’s reliance on work visas to “change American staff with cheaper overseas labor.”

However no matter it was that value Plumb his job, his skepticism about AI-powered job substitute is shared by many economists.

“We simply do not know,” mentioned Karan Girotra, professor of administration at Cornell College’s enterprise faculty. “Not as a result of AI is not nice, however as a result of it requires a number of changes and a lot of the advantages accrue to the person workers somewhat than the group. Folks save time and get their work achieved sooner.”

If an employer works sooner due to AI, Girotra says it can take time to adapt an organization’s administration construction to permit for a smaller workforce. He is not satisfied that is occurring at Amazon, which he says continues to be scaling again after a hiring glut through the COVID-19 pandemic.

A report from Goldman Sachs states that the general impression of AI on the labor market stays restricted, though some results could also be felt in “particular professions equivalent to advertising and marketing, graphic design, customer support and particularly know-how.” These are areas with duties that correlate with the strengths of the present technology of generative AI chatbots that may write emails and advertising and marketing pitches, produce artificial photos, reply questions and help write code.

However the financial institution’s financial analysis arm mentioned in its newest month-to-month AI adoption tracker that “only a few workers have been affected by company layoffs attributed to AI” since December, though the report was printed on January 16, earlier than Amazon, Dow and Pinterest introduced their layoffs.

San Francisco-based Pinterest was probably the most specific in its declare that AI has brought on its workforce to shrink by as much as 15%. The social media firm mentioned it’s “making organizational adjustments to additional notice our AI-forward technique, together with hiring AI-savvy expertise. Consequently, we’ve made the troublesome resolution to half methods with a few of our crew members.”

Pinterest reiterated that message in a regulatory disclosure that mentioned the corporate was “reallocating sources to AI-focused roles and groups that drive AI adoption and execution.”

Expedia has made an analogous message, however the 162 tech workers the journey web site faraway from its Seattle headquarters final week embody a number of AI-specific roles, equivalent to machine studying scientists.

Dow’s disclosures tied the 4,500 layoffs to a brand new plan “leveraging AI and automation” to extend productiveness and enhance shareholder returns.

Amazon’s 16,000 job cuts have been a part of a broader workforce discount on the e-commerce big. Similtaneously these cuts, that are believed to be all workplace jobs, Amazon mentioned it could reduce about 5,000 retail staff, in keeping with notices it despatched to state labor companies in California, Maryland and Washington, on account of its resolution to shuts down almost everything are Amazon Go and Amazon Recent shops.

That is on high of a round of 14,000 job losses in October, bringing the overall to greater than 30,000 since Jassy first pushed AI-driven organizational change.

Like many different corporations, each in know-how and elsewhere, however particularly people who make and promote AI instruments and companies, Amazon has pushed its workforce to seek out better efficiencies with AI.

Meta CEO Mark Zuckerberg mentioned final week that 2026 would be the yr when “AI begins to dramatically change the way in which we work.”

“We’re investing in AI-native instruments so people at Meta can get extra achieved, growing particular person contributors and flattening groups,” he mentioned throughout an earnings name. “We see that tasks that used to require massive groups at the moment are being carried out by one very gifted particular person.”

Up to now this yr, Meta’s layoffs have targeted on job cuts in its digital actuality and Metaverse divisions. Additionally impacting employment is that the business is shifting sources to AI growth, which requires big expenditures on pc chips, energy-hungry information facilities and expertise.

Jassy advised Amazon workers final June to “be interested in AI, educate your self, attend workshops and coaching, use and experiment with AI every time you possibly can, take part in your crew’s brainstorms to determine how you can invent for our prospects sooner and extra comprehensively, and how you can get extra achieved with scrappier groups.”

Plumb wholeheartedly agreed, saying he had demonstrated proficiency in utilizing Kiro, Amazon’s AI coding instrument, to “remedy big issues” within the firm’s compensation system.

“In case you weren’t utilizing them, your supervisor would get a report and discuss to you about utilizing them,” he mentioned. “There have been solely 5 folks in your entire firm who have been increased customers of Kiro than me, or had achieved extra milestones.”

Now he’s switching gears to declare his candidacy amongst a subject of Houston-area Republicans in search of to dethrone U.S. Rep. Dan Crenshaw within the March major.

Cornell’s Girotra mentioned it is attainable that growing AI productiveness will immediate corporations to chop again on center administration, however he mentioned the truth is that these making layoff choices “simply have to chop prices and let it occur. That is it. I do not suppose they care what the rationale for that’s.”

Not all corporations cite AI as a cause for cuts. House Depot confirmed Thursday that it was eliminating 800 positions related to its Atlanta headquarters, though most affected workers have been working remotely.

House Depot spokesman George Lane mentioned House Depot’s cuts weren’t about AI or automation, however have been “actually about pace, agility” and serving the wants of its prospects and frontline staff.

And health tools maker Peloton confirmed Friday that it’s chopping its workforce by 11% as a part of a broader cost-cutting effort led by CEO Peter Stern to cut back working prices.

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AP Retail Author Anne D’Innocenzio contributed to this report.