N. Lee Plumb’s recent experience of being laid off from Amazon has left him pondering the motives behind the decision, particularly in relation to the company’s push for artificial intelligence. Despite his dismissal, Plumb is confident that his commitment to Amazon’s AI integration was not the issue.
As the head of “AI enablement” for his team, Plumb actively utilized Amazon’s AI coding tool, earning the distinction of being one of its top users. This unexpected layoff occurred alongside Amazon’s announcement of cutting 16,000 corporate jobs, a move many interpret as part of CEO Andy Jassy’s strategy to streamline the workforce by leveraging AI for greater efficiency.
While it’s clear that AI is shaping workforce dynamics at various tech firms—including Expedia, Pinterest, and Dow—it’s challenging for experts and affected employees like Plumb to determine whether AI genuinely justifies these layoffs or if it merely serves as a narrative to reassure investors.
“AI needs to demonstrate a return on investment,” Plumb, an Amazon employee for eight years, explains. “By reducing headcount, companies showcase efficiency, attracting more capital, which in turn can lead to a spike in share prices.” He highlights the potential for organizations to frame layoffs as a transition driven by AI rather than poor decision-making.
Plumb is not just an Amazon employee; he is also campaigning for a congressional seat in Texas. His platform advocates for reducing the tech sector’s dependence on work visas that can lead to the replacement of American workers. Regardless of the reasons behind his job loss, his reservations about AI-induced job displacement echo sentiments shared by many economists.
“It’s difficult to assess,” says Karan Girotra, a management professor at Cornell University. “While AI has its advantages, the benefits often go to individual employees rather than the organization as a whole, as people finish their tasks more quickly.” Girotra notes that adjusting company structures can take time, and he remains skeptical that Amazon is effectively downsizing from its previous rapid expansion during the COVID-19 pandemic.
Goldman Sachs recently reported that AI’s overall effect on the labor market is still limited, although particular sectors such as marketing, graphic design, customer service, and technology might feel more pronounced changes. These are industries where generative AI, capable of tasks like writing emails, crafting marketing proposals, and assisting in coding, can be particularly impactful.
Despite the ongoing layoffs at firms like Amazon, Dow, and Pinterest, Goldman Sachs noted that up until recently, very few layoffs could definitively be attributed to AI. Pinterest explicitly associated its decision to cut up to 15% of its workforce with its commitment to an AI-forward strategy, pledging to focus hiring on AI-savvy employees.
Similarly, while Expedia’s recent layoffs included cuts to AI-specific positions, the message closely mirrored that of Pinterest’s reallocation towards AI roles. In contrast, Dow cited AI and automation as integral to its strategy for enhancing productivity and shareholder returns amidst its layoffs of 4,500 employees.
In the wake of these layoffs, Amazon also announced a plan to cut about 5,000 retail positions, coinciding with closures of its Amazon Go and Amazon Fresh stores. This reduction is part of a larger trend, with layoffs surpassing 30,000 since Jassy’s early indications of a shift toward AI-driven organizational changes.
Amid these changes, companies across the tech spectrum are urging their teams to uncover efficiencies through AI. Meta’s CEO, Mark Zuckerberg, recently forecasted that by 2026, AI will significantly alter work dynamics, emphasizing the importance of AI-native tools to boost productivity and streamline operations.
Plumb embraced this ethos at Amazon, leveraging tools like Kiro to tackle complex issues in compensation systems, earning recognition as one of the top users within the company. Now, as he pivots to his political ambitions, he joins a multifaceted discussion about how AI is transforming workplaces.
Girotra suggests that while AI may lead to the reduction of certain middle management roles, the reality is that decision-makers are primarily focused on cost-cutting rather than the rationale behind these layoffs. Some companies, however, like Home Depot, clarify that their recent cuts aren’t linked to AI; instead, they focus on enhancing responsiveness to customer needs.
Additionally, Peloton has announced a workforce reduction of 11%, part of a broader strategy to cut costs under its CEO Peter Stern. As this trend continues, the complex interplay between AI technology and corporate decision-making remains a focal point in discussions around the future of work.
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AP Retail Writer Anne D’Innocenzio contributed to this report.
