{"id":258497,"date":"2025-10-29T10:33:15","date_gmt":"2025-10-29T10:33:15","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/258497\/"},"modified":"2025-10-29T10:33:15","modified_gmt":"2025-10-29T10:33:15","slug":"what-amazons-mass-layoffs-are-really-about","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/258497\/","title":{"rendered":"What Amazon\u2019s mass layoffs are really about"},"content":{"rendered":"

\n A version of this story will appear in CNN Business\u2019 Nightcap newsletter. To get it in your inbox, sign up for free here<\/a>.\n<\/p>\n

New York
\n \u00a0\u2014\u00a0<\/p>\n

\n Amazon \u2014 a company that made more than $35 billion in profit in the first half of 2025 and is on track to spend more than $120 billion on AI this year \u2014 is laying off tens of thousands of people, citing its desire to slim down and \u201coperate like the world\u2019s largest startup.\u201d\n <\/p>\n

\n The overall message from Amazon reflected a familiar impulse in Corporate America to reduce headcount in the face of rising prices, an unpredictable trade war and a potential (though still largely speculative) artificial-intelligence revolution. Amazon isn\u2019t alone: UPS on Tuesday<\/a> announced it had cut some 48,000 workers this year; Target eliminated 1,800<\/a> corporate jobs last week \u201cto be stronger, faster and better positioned\u201d for the future, its new CEO said; and other spectacularly profitable tech players like Microsoft<\/a> and Meta<\/a> have also shed staff by the thousands recently.\n <\/p>\n

\n But the impulse, which tends to please Wall Street in the short term, also amounts to a giant gamble on a technology that has yet to prove it can deliver the efficiencies its backers have long promised.\n <\/p>\n

\n \u201cI think we\u2019re going to see a big trend where people are expecting a whole lot of this technology, and not everything we\u2019re expecting will pan out,\u201d said Sam Ransbotham, professor of business analytics at Boston College\u2019s Carroll School of Management.\n <\/p>\n

\n To be sure, Amazon appears to be cutting staff in anticipation of AI productivity gains, rather than in response to them. A spokesperson for the company said AI advancements were not responsible for the vast majority of the 14,000 cuts the company announced Tuesday. Although CEO Andy Jassy has warned about AI \u201cagents\u201d replacing workers, there is no indication that is happening yet.\n <\/p>\n

\n But the company\u2019s memo announcing the layoffs reiterated Jassy\u2019s belief that AI is bound to transform the workplace.\n <\/p>\n

\n \u201cWe need to remember is that the world is changing quickly,\u201d the memo says, adding that \u201cwe\u2019re convinced\u201d that a leaner workforce is the key to leading in the AI era.\n <\/p>\n

\n At the same time, Amazon, like other giant employers, is not immune to the uncertain business climate that has prompted other companies to put the brakes on hiring and look for ways to tighten their belts as they absorb the costs of tariffs and anxiously await a lasting US-China trade deal.\n <\/p>\n

\n \u201cThere are probably many reasons behind a change in staffing and a change in workforce,\u201d beyond just preparing for an AI-enabled future, Ransbotham said. And although AI tools are evolving, they also can be a convenient head-fake when other problems may be dogging a business.\n <\/p>\n

\n These days companies are touting, and often overstating, their AI bona fides. A study released Tuesday<\/a> by Indeed found that mentions of \u201cAI\u201d in job postings are rising, but about a quarter of them lack context about how AI would be used in the role, a trend known as AI-washing.\n <\/p>\n

\n Similarly, management experts have raised doubts about the true impact of AI on layoffs.\n <\/p>\n

\n \u201cVery few companies are actually replacing people with AI right now,\u201d Jessica Kriegel, chief strategy officer at executive advisory firm Culture Partners, told CNN. \u201cWhat we\u2019re seeing instead are preemptive layoffs \u2026 Leaders want the financial runway to explore how AI might drive efficiency, but the technology isn\u2019t yet ready to take over most human roles.\u201d\n <\/p>\n

\n Despite tech companies\u2019 promises about the capabilities of generative AI, the technology has frequently fallen short of its promoters\u2019 lofty ambitions to streamline drudgery and free up humans to do more creative, fulfilling work. Increased adoption so far hasn\u2019t translated<\/a> to economy-upending productivity gains, but it has yielded an explosion of \u201cworkslop\u201d<\/a> \u2013 the gobbledygook some chatbots produce that have the look of real work without the substance that makes it valuable.\n <\/p>\n

\n Chatbots are challenging the dominance<\/a> of online search, and are often used to troubleshoot potential problems in computer code. But they are also prone to errors that can be hard to detect. Adoption has exploded since ChatGPT was released three years ago, but so, too, have stories of humans developing harmful relationships with chatbots.\n <\/p>\n

\n Amazon, which is set to report quarterly earnings Thursday, didn\u2019t indicate which teams would be affected by the cuts. Its stock was up just over 1% on Tuesday.\n <\/p>\n

\n And while the cuts \u2013 which could eventually top 30,000, according to Reuters \u2013 are likely to please Wall Street in the short term by padding Amazon\u2019s profit margins, such drastic staff reductions bring longer term risks and hidden costs, Kriegel said.\n <\/p>\n

\n \u201cSlimming down too early doesn\u2019t make a company nimble; it makes it brittle,\u201d she said. \u201cThe companies that will win this revolution aren\u2019t the ones that automate the fastest. They\u2019re the ones that stay adaptable enough to catch the system when it slips.\u201d\n <\/p>\n","protected":false},"excerpt":{"rendered":"A version of this story will appear in CNN Business\u2019 Nightcap newsletter. To get it in your inbox,…\n","protected":false},"author":2,"featured_media":258498,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,101],"class_list":["post-258497","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/258497","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=258497"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/258497\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/258498"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=258497"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=258497"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=258497"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}