Amazon CEO Says The ‘Quiet Part Out Loud’ About AI Job Losses

Amazon CEO Andy Jassy has openly admitted that artificial intelligence (AI) will decrease the corporate workforce of the company, which is a rare, honest confession in the corporate environment. Jassy, in a memo on Tuesday, told employees to do more with smaller, scrappier teams and clarified that the growing use of AI at Amazon would eventually reduce headcount. Amazon is the second-largest private employer in the U.S., with approximately 1.5 million employees, so the consequences of the statement made by Jassy are severe.

According to workplace experts, Jassy is being open, and it may encourage other CEOs to be more forthcoming about the effects of AI on employment. Executive coach Marlo Lyons referred to the move as culture modeling, saying that this level of openness could serve as an example to other companies, especially smaller ones. Lyons said, framing the disclosure as both unsettling and refreshingly direct: At least my company is being honest.

Other business executives have expressed their expectations on AI as well. Recently, the Shopify CEO, Tobi Lutke, said that the hiring process now needs to demonstrate that AI is not capable of doing the work better. Klarna CEO Sebastian Siemiatkowski announced that AI can fulfill all the current positions, and the company will stop hiring new people. In the meantime, OpenAI CEO Sam Altman forecasted that AI agents would be used as junior employees in the near future.

The increased openness has sent out alarm bells. Cary Cooper, a professor at the Manchester Business School, told the Times that Jassy’s memo would cause shivers down the spines of employees and would result in immediate strategy discussions at the HR level. Analysts caution that firms will lose valuable talent unless they know how their jobs will be affected and whether they will be retrained.

Although companies can justify layoffs as an AI implementation, Thomas Roulet of the University of Cambridge warned that most companies downsized without integrating AI completely. AI, he said, is an excellent scapegoat for unpopular strategic decisions. The complexity is reinforced by the fact that Klarna itself reversed its decision to lay off employees in 2022, hiring them back.

The reality is that AI implementation is sloppy and iterative. Roulet said it requires a lot of learning cycles. It is not something that becomes evident in a night.