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So, what’s the deal with Amazon laying off tens of thousands of workers? You’d think that with over $35 billion in profits during the first half of 2025 and plans to spend upwards of $120 billion on AI in the near future, they’d be hiring more people instead. Yet, their recent move to cut jobs is said to be all about wanting to operate more nimbly, like ‘the biggest startup in the world.’
The message here isn’t just about Amazon; it’s part of a trend among big companies trying to trim down their workforce as prices rise, trade wars cause havoc, and the next tech revolution is lurking on the horizon. Amazon’s not the only player making cuts—UPS reportedly let go of 48,000 workers this year alone; even Target axed 1,800 jobs last week with hopes of boosting performance under its new CEO. Other tech giants like Microsoft and Meta are also letting thousands go.
While those layoffs might please investors right away, it ultimately raises the stakes on a technology, namely AI, that hasn’t yet proven it’ll deliver the promised productivity boost.
Sam Ransbotham, a business analytics professor at Boston College, highlights a crucial point. “There’s going to be a big expectation around this technology, but reality might not live up to the hype—it’ll take time to see real results,” he explains.
Interestingly, it seems Amazon is cutting jobs not necessarily because AI is currently doing the work, but in anticipation of it eventually taking over. An Amazon spokesperson stated that a significant portion of the 14,000 cuts couldn’t be blamed on AI advancements just yet. Although CEO Andy Jassy mentioned that AI could replace some jobs in the future, we’re not seeing evidence of that happening now.
Still, the memo announcing these layoffs echoed Jassy’s assertion that we’re on the brink of a significant workforce transformation thanks to AI. It indicated that Amazon is betting on a slimmer upgradable workforce as the way to s d in a tech-driven future.
It’s also crucial to keep in mind that Amazon isn’t immune to the pressures of the current business landscape, which has other companies tightening their belts too. Facing rising costs and an uncertain trade environment, they’ve decided to make staffing changes. “There are probably layers to their decisions beyond just getting ready for AI,” Ransbotham noted. Meanwhile, hitting pause on hiring as companies adjust to ongoing economic uncertainties is becoming standard practice.
Long-Term Effects
These days, companies often exaggerate their AI prowess. According to a recent study from Indeed, mentions of ‘AI’ in job ads are on the rise, but about 25% of those don’t explain how exactly AI will be integrated into job roles—a trend aptly termed AI-washing.
Moreover, experts are skeptical about how effective AI really is when it comes to layoffs. “Right now, only a select few companies are actually replacing employees with AI,” said Jessica Kriegel, chief strategy officer at Culture Partners. “Leading companies want to ensure they have the financial means to explore AI for efficiency, but the technology isn’t fully capable of taking over many jobs just yet.”
Despite lofty claims surrounding generative AI, the results haven’t consistently lived up to expectations. Instead of streamlining tasks, manufacturers have faced increased ‘workslop’—clarified thoughts that say a lot but contribute little value. Chatbots flood the tech space and pose as alternatives to online search, but they’re often riddled with inaccuracies that fly under the radar. Ever since ChatGPT hit the scene, its rapid acceptance has also stirred discussions on unhealthy human-bot relationships.
While Amazon is set to announce its quarterly earnings later this week, they’ve yet to specify which teams will bear the brunt of the layoffs. Interestingly, their stock saw a slight uptick of about 1% on Tuesday.
As these layoffs develop—potentially exceeding 30,000 wage losses, per Reuters—it might give Wall Street a temporary boost, making the numbers look appealing. However, such drastic staff cuts bring long-term challenges and unforeseen consequences, according to Kriegel. “Slashing too early can lead a company to become rigid rather than agile,” she remarked. “Ultimately, it’s the adaptable companies that will thrive, not necessarily the ones that automate the soonest.”
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