Amazon CEO says layoffs aren't about AI, as cuts spark job apocalypse panic
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Amazon CEO Andy Jassy speaking at an event in February. Photo: Michael Nagle/Bloomberg via Getty Images
Amazon CEO Andy Jassy says the company's announcement of layoffs earlier this week wasn't about AI.
Why it matters: The cuts of 14,000 white-collar workers at the tech and retail giant have triggered fears of a growing AI job apocalypse, but labor market reality is more nuanced.
- The job market slump we're seeing right now is complicated by other factors. AI — though certainly disruptive — is lower down on the list.
State of play: On an earnings call Thursday, Jassy was asked about the company's headcount.
- "The announcement that we made a few days ago was not really financially driven and it's not even really AI-driven, not right now, at least," the Amazon CEO said.
- "It really — it's culture. And if you grow as fast as we did for several years, the size of businesses, the number of people, the number of locations, the types of businesses you're in, you end up with a lot more people than what you had before, and you end up with a lot more layers."
Zoom out: There's still a surprising amount of hiring hangover in tech, even in 2025.
- Companies went on hiring binges coming out of the pandemic, when software engineers could name their price and job-hopping was everywhere.
- The correction began with layoffs in 2023 and has been slowly grinding along since. Employers are barely hiring right now.
The big picture: With the government shutdown, the Bureau of Labor Statistics isn't putting out job reports and it's difficult to see the full scope of what's happening.
- It's certainly possible AI is driving layoffs this month, but it didn't make the list of the top three leading causes for layoffs this year, per a recent report from Challenger, Gray & Christmas, which tracks layoffs.
Zoom in: The top three reasons:
- Federal government job cuts. "DOGE actions" were cited in nearly 300,00 layoffs through September — direct firing in the government and losses to private nonprofits and others.
- Market and economic conditions. Employers are waiting out uncertainty over tariffs and inflation. Cited in 208,000 cuts.
- Store and plant closures. The typical business churn.
Between the lines: The U.S. labor market is massive, with an incredible amount of turnover.
- It's hard to extrapolate a trend from a few anecdotes.
- In any given month there are around 1.5 million layoffs — even in the best job markets.
- In 2022, when the labor market was red hot there were around 1.3 million layoffs a month, per the BLS. In August, the number was about 1.7 million — still lower than pre-pandemic trends.
"I'm very skeptical of extracting signal from headline layoff notices," Ernie Tedeschi, former chief economist for the White House Council of Economic Advisers, told Axios earlier this week.
- There's no question the job market is weak — the unemployment rate moved up a full percentage point over the past year.
- But this story is bigger than AI.
- "I think companies are under a lot of pressure to tell investors and boards that they're adopting AI," Tedeschi said.
By the numbers: Amazon's headcount exploded in the pandemic to around 1.6 million full- and part-time employees, mostly blue-collar employees.
- At the start of 2019, the company had about 650,000 employees.
- It's been cutting back for the past three years, beginning in 2022, when it laid off 10,000 employees in its corporate divisions — about 3% of that specific workforce.
Yes, but: Jassy in the past has said that Amazon won't need to hire as many people because of AI.
