The one thing N. Lee Plumb is sure about his firing from Amazon last week is that it wasn’t a failure in his involvement in the company’s artificial intelligence projects.
Plumb, who is responsible for “AI enablement” on his team, says he has been so prolific in his use of Amazon’s new AI coding tool that the company has flagged him as one of its top users.
Many have assumed that Amazon’s 16,000 companies layoffs announced last week reflected CEO Andy Jassy’s desire to “reduce our overall headcount across the company, as we achieve efficiencies through the extensive use of AI across the business.”
But like other companies that have linked workforce changes to AI, including Expedia, Pinterest And Dow Last week, it may be difficult for economists, or for individual employees like Plumb, to know whether AI is the real reason for the layoffs or whether it’s the message a company wants to send to Wall Street.
“AI needs to generate a return on investment,” said Plumb, who worked at Amazon for eight years. “When you downsize, you become more efficient, you attract more capital, the stock price goes up.”
“So it could be that you were bloated to begin with, you reduced the number of employees, you attributed it to AI, and now you have a value story,” he said.
Plumb is atypical for an Amazon worker in that he is also leading what he describes as a “long-term” run for Congress in Texas, on a platform focused on ending the tech industry’s reliance on work visas to “replace American workers with cheaper foreign labor.”
But whatever cost Plumb his job, his skepticism about AI replacing jobs is shared by many economists.
“We just don’t know,” said Karan Girotra, a management professor at Cornell University’s business school. “Not because AI isn’t great, but because it requires a lot of tweaking and most of the gains go to individual employees rather than the organization. People save time and do their jobs sooner.”
If an employer works faster with AI, Girotra said it would take time to adjust a company’s management structure in a way that allows for a smaller workforce. He’s not convinced that’s happening at Amazon, which he says continues to cut back on hiring during the COVID-19 pandemic.
A report from Goldman Sachs indicates that the overall impact of AI on the job market remains limited, although some effects could be felt in “specific professions such as marketing, graphic design, customer service and especially technology.” These are areas involving tasks that correlate with the strengths of the current generation of generative AI chatbots capable of writing emails and marketing pitches, producing synthetic images, answering questions and answering questions. help write code.
But the bank’s economic research division said in its latest monthly report on AI adoption that, since December, “very few employees have been affected by corporate layoffs attributed to AI,” although the report was released on Jan. 16, before Amazon, Dow and Pinterest announced their layoffs.
San Francisco-based Pinterest has been the most explicit in saying that AI has caused it to cut up to 15% of its workforce. The social media company said it was “making organizational changes to continue its AI-first strategy, which includes recruiting skilled AI talent. As a result, we have made the difficult decision to say goodbye to certain members of our team.”
Pinterest echoed that message in a regulatory disclosure that said the company was “reallocating resources to AI-focused roles and teams that drive AI adoption and execution.”
Expedia had a similar message, but the 162 tech workers the travel website cut from its Seattle headquarters last week included several AI-specific roles, such as machine learning scientists.
Dow’s regulatory disclosures link its 4,500 layoffs to a new plan “using AI and automation” to increase productivity and improve shareholder returns.
The 16,000 job cuts at Amazon were part of a broader reduction in the e-commerce giant’s workforce. Along with the cuts, all considered office jobs, Amazon announced it would cut about 5,000 retail jobs, according to notices sent to state workforce agencies in California, Maryland and Washington, following its decision to cut jobs. close almost everything its Amazon Go and Amazon Fresh stores.
It’s above a round of 14,000 job cuts in October, bringing the total to well over 30,000 since Jassy first reported a push for AI-driven organizational changes.
Like many companies, technology and otherwise, but particularly those that make and sell AI tools and services, Amazon has pushed its employees to find more efficiencies through AI.
Meta CEO Mark Zuckerberg said last week that 2026 will be the time when “AI begins to radically change the way we work.”
“We’re investing in AI-native tools so individuals at Meta can do more, we’re elevating individual contributors and flattening teams,” he said on an earnings call. “We are starting to see projects that once required large teams now being completed by one very talented person. »
Meta’s layoffs so far this year have focused on cutting jobs in its VR and Metaverse divisions. Shifting resources to AI development, which requires huge spending on computer chips, power-hungry data centers and talent, also impacts employment.
Jassy told Amazon employees last June to be “curious about AI, educate yourself, attend workshops and training, use and experiment with AI whenever you can, participate in your team’s brainstorms to figure out how to invent for our customers faster and more widely, and how to do more with scrappier teams.” »
Plumb fully agreed with this and said he demonstrated mastery of using Amazon’s AI coding tool, Kiro, to “solve huge problems” in the company’s compensation system.
“If you weren’t using them, your manager would get a report and talk to you about its use,” he said. “There were only five people in the entire company who were bigger Kiro users than me, or who had reached more milestones.”
He’s now shifting gears and running among a group of Houston-area Republicans seeking to unseat U.S. Rep. Dan Crenshaw in the March primary.
Cornell’s Girotra said it’s possible that AI’s productivity boost will lead companies to cut middle managers, but he said the reality is that those making layoff decisions “just need to cut costs and get there. That’s it. I don’t think they care about the reason for that.”
Not all companies cite AI as a reason for budget cuts. Home Depot confirmed Thursday that it was eliminating 800 positions related to its Atlanta headquarters, although most of the affected employees were working remotely.
Home Depot spokesperson George Lane said Home Depot’s cuts were not driven by AI or automation, but “really about speed, agility” and meeting the needs of its customers and front-line workers.
And exercise equipment maker Peloton confirmed Friday that it is reducing its workforce by 11% as part of a broader cost-cutting measure under CEO Peter Stern to reduce operating expenses.
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AP Retail Writer Anne D’Innocenzio contributed to this report.