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June 24, 2025
Why Is Amazon’s CEO Warning of AI-Driven Job Losses?
Amazon’s CEO, Andy Jassy, last week joined a number of other high-profile U.S. CEOs cautioning that artificial intelligence (AI) would lead to job cuts.
In a 1,200-word blog post entitled “Some thoughts on Generative AI,” Jassy urged employees to “be curious” about AI and spent much of the blog entry hailing potential advances due to AI, including the capacity to “improve inventory placement, demand forecasting, and the efficiency of our robots.”
However, toward the end, Jassy said AI’s “efficiency gains” would allow the company to reduce its corporate workforce.
“We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs,” he wrote. “It’s hard to know exactly where this nets out over time, but in the next few years, we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company.”
His comments come amid a barrage of studies and commentary about AI and its potential to put humans out of work.
Executives at JP Morgan, Meta, IBM, OpenAI, chatbot developer Anthropic, and Britain’s biggest broadband and mobile provider BT Group have also warned about AI causing job loss.
Other corporate leaders, including those at Shopify, are predicting that AI will reimagine job roles in what amounts to a threat to employees to learn AI or get left behind. Nvidia CEO Jensen Huang said last month, “You’re not going to lose your job to an AI, but you’re going to lose your job to someone who uses AI.”
Others are slowing or stopping hiring as they adjust to AI’s impact.
In a column for CNN, business writer Allison Morrow said Jassy and other execs are “clearly invoking AI to put a modern spin on a strategy as old as time: Keep workers working by making them afraid of losing their jobs.”
Brian Elliott, CEO of Work Forward and a leadership advisor, told Axios that he believes the warnings are partly because many employees aren’t taking AI’s arrival seriously enough.
Christopher Myers, the faculty director of the Center for Innovative Leadership at the Johns Hopkins Carey Business School, told Business Insider that it’s better for executives to acknowledge that AI “almost certainly” will change roles and perhaps impact entire organizational charts.
With CEOs worried about their own job loss, the warnings also signal to all stakeholders that they’re committed to transformative changes caused by AI.
“It’s a message to shareholders and board members as much as it is to employees,” Molly Kinder, a Brookings Institution fellow who studies the impact of AI, told the Washington Post regarding the CEO announcements. “You’re projecting that you’re out in the future, that you’re embracing and adopting this so much that the footprint [of your company] will look different.”
Discussion Questions
Why are Amazon and other firms forecasting job reductions and other disruptions due to advances in artificial intelligence?
Is it the right approach?
Poll
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Pamela Kaplan
Principal, PK Consulting
Mark Ryski
Founder, CEO & Author, HeadCount Corporation
James Tenser
Retail Tech Marketing Strategist | B2B Expert Storytelling™ Guru | President, VSN Media LLC
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Amazon is a very automated business. However, there is huge scope for further automation with AI. The company will follow this trajectory to reduce the cost to serve; this ultimately benefits customers. Does this result in fewer jobs? Yes. Will it create new jobs? Probably.
Amazon signals this to the market as it underscores the efficiency gains it can make.
Loads of white collar workers are in the crosshairs with AI, unless they become adept AI users themselves.
Firms like Amazon are investing extraordinary amounts of capital in AI, in part because it will increase productivity – they, and everyone else, now needs to put their money where their mouth is. While the messaging from Jassy and others may be somewhat foreshadowing, it is all most certainly deliberate, as these corporate leaders telegraph what’s happening to their own workforces, and everyone else’s by extension. Eventually, this is going to become so pervasive and widespread that how it get’s communicated will ultimately matter little. The message is clear and simple: AI and automation will impact work as we know it. Get used to it.
I believe that AI will change the way we work and could affect jobs today as we know it. It’s a disruptor, and I believe out of it there will also be discovery and growth. We need to learn how to use it to create efficiency. Not all change is bad and we need to learn how to adapt to it.
I agree with Mr. Huang of Invidia that people with AI expertise will take over some jobs presently handled by high-value expert workers. But I also think Mr. Jassy of Amazon may be glossing over some of the new costs that AI brings in sharing his rosy outlook with Wall St.
AI data centers soak up a lot of electric power, for one. Corporate-owned power plants may be needed, and these will be capital intensive and create new operating jobs. Re-designing work flows and human touchpoints presents some challenges/opportunities that have not yet been mastered. I think that makes the outlook less predictable than the tech bro’s want investors to believe.
I’m sure there are more known and unknown unknowns about AI adoption that will be confronted.
CEOs are warning about AI-driven job cuts because automating menial tasks is sparking organizational restructuring that makes some workers redundant.
The companies mentioned are AI early adopters who invest in the technology in part to cut costs amid inflation. Labor is often the biggest expense on a balance sheet.
A few of the companies mentioned invested in hiring sprees during the pandemic. Now AI helps them trim and rightsize their workforce.
The timing and transparency of these AI announcements are unlike those of previous technological disruptions that companies have downplayed. This time around, the strategic communication resembles preemptive disclosures that work to anchor expectations of future workforce reductions while positioning Amazon as a forward-thinking leader rather than a cost-cutter.
Amazon’s AI efficiency gains (and job cuts) will have a cascade effect in retail and beyond, given its network size and reach. This will force competitors to match the new efficiency frontier, which in turn accelerates the reconfiguration of the workforce. The emerging psychological contract appears to be “continuously adapt, learn AI, or become obsolete.”
A significant risk that Amazon and others must consider is the loss of human judgment and institutional knowledge, which is often required in complex systems. Over-automation can make an organization brittle. Savvy retailers will focus on augmentation over replacement and creating AI-Human hybrid teams.
The AI transition represents a phase shift that industry cannot manage alone. Corporate America is essentially conducting a massive social experiment with workforce displacement while education and safety net systems remain decades behind the curve.
Strong response, Mohammed
This topic is quite interesting. While some might view this as a method to frame corporate cost cutting positively, it is important to note that such cost cutting has been a common practice historically. Mustafa Suleyman’s book “The Coming Wave” discusses the potential impacts of AI, including job displacement. Additionally, Bill Gates suggested that organizations should be taxed on the use of robots in the same way they are taxed on human labour. For those who have researched this topic, these developments should not come as a surprise.
Organisaions also need to manage expectations regarding the changes automation will bring to both white-collar and blue-collar jobs in the coming years.
It’s true. When I first read Jessy’s remarks I thought “a built-in excuse for layoffs.” When my customer service phone experience gets better, I’ll believe that AI is actually being used in corporations in a meaningful way. The only thing I’ve heard about that, is that they’re going to use the equivalent of a spoken auto tune to remove agents’ accents. Really???? Wouldn’t training them and giving them access to AI in their own languages be more customer friendly? And getting better VOIP systems?
Check out https://www.bland.ai/. It’s a bit more than autotuning accents.
Jassey and other leaders should say it again and again. This is merely the history of technology and jobs. Think about those old movies where banks of telephone operators connected calls. Or, how about those offices with rooms filled with typists banging out reams of paper.
Today in the U.S., there is great concern about the loss of manufacturing jobs (a trend that has been ongoing for decades), yet U.S. manufacturing output has been record-breaking every year. Are we interested in jobs or the efficiency and productivity that technology brings?
AI is bringing speed and efficiency. Faster learning curves. Deeper discovery. Efficiency probably means less headcount…at some point, in some departments and functions. So a CEO talking about lower headcounts in an open and transparent manner sounds like a really healthy, if uncomfortable, thing. The whole evolutionary process is a blending of Knowns and Unknowns. And of course there will be anxiety along the way. But I think less anxiety than a series of surprise layoffs over the course of time.
AI will indeed replace many jobs, and yes, will also create new jobs and require new skills. Everyone needs to be open to learning to use it, just like when we migrated from slide rules to calculators.
Artificial intelligence advances are expected to automate many tasks that were previously performed by humans, which will result in the reduction of jobs.
While automation can increase productivity for companies and reduce costs, it may also result in the abolition of certain jobs. Thus, workers may have to adapt by acquiring new skills or changing careers.
Workers may find it challenging to adapt to new roles or industries, since it often requires a significant investment in time and education.
Some individuals may find it difficult to access the resources or support necessary to make such a transition, particularly those living in low-income or underserved communities. In addition, the psychological and emotional effects of job displacement may result in increased stress and uncertainty regarding the future.
Time for my contrarian viewpoint. Jassey is simply putting forth the continued mythology that people are an unfortunate need within business. This idea descends into modern business from Technocratic mythologies which reach back into the early 1800s. It is also a mythology. Partly, Jassey is telling investors what they want to hear as it implies “lower costs” but that’s a fantasy. Amazon’s problem isn’t becoming more efficient — but finding more profitable things to sell. Doing that requires envisioning people as a critical contribution to those efforts. (We do well to remember Rory Sutherland’s doorman fallacy here. While a machine can easily open a door, it can’t make hotel guests feel cared for.) Jassey is clearly dashing off to make the problem W. Edwards Deming identified even worse: “The greatest waste in America is failure to use the abilities of people”.
Companies on hiring binges used to be looked at as fast-growing. Now companies reducing headcount and replacing with AI are viewed as more efficient operators. In a backhand way, Amazon is making clear it’s following the efficient operator game plan.