Amazon CEO urges employees to gain expertise on AI tools

Amazon signals that its next round of job cuts could be tied to its growing use of artificial intelligence. In a message to staff on Tuesday, CEO Andy Jassy praised generative AI as a game-changer but made clear that efficiency gains from these tools will likely shrink the company’s corporate head count over time.

Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used in “virtually every corner of the company.” He noted that Amazon has more than 1,000 generative AI services and applications under way, and that this number represents only “a small fraction of what we will ultimately build.”

This push follows Amazon’s pledge to invest roughly $100 billion in AI technologies during the current fiscal year.

But for the company’s roughly 1.5 million employees, the message was a sobering one. Jassy warned that as AI changes how work gets done, the firm will need “fewer people doing some of the jobs that are being done today, and more people doing other types of jobs.”

He added, “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.”

Amazon CEO urged employees to gain expertise on AI tools

“Be curious about AI, educate yourself, attend workshops and take trainings, use and experiment with AI whenever you can, participate in your team’s brainstorms to figure out how to invent for our customers more quickly and expansively, and how to get more done with scrappier teams.”

Amazon has already cut staff in parts of its business it doesn’t consider essential. Earlier this year, the devices and services team lost about 100 jobs, and the books department saw a similar reduction.

Overall, CNBC reports that the company has cut around 27,000 positions since 2022 and is preparing for more.

Shares of Amazon have fallen about 2.5% so far this year.

The Seattle-based company is pouring much of its planned $100 billion investment into AI infrastructure as it races rivals Google and Microsoft to lead the AI boom and to fuel growth at its lucrative cloud arm, Amazon Web Services.

Last year, Jassy said he wanted to “eliminate bureaucracy” by creating a flatter organizational structure with fewer layers of middle management. In two major rounds of cuts in 2023, Amazon shed 27,000 roles, and this year Amazon Web Services trimmed hundreds more.

Across the tech sector, leaders have generally chosen to highlight efficiency gains over the prospect of job losses from AI.

In May, Microsoft reduced its global workforce by 3%. State filings in Washington indicate that many of those affected were software engineers. CEO Satya Nadella has publicly noted that perhaps “20-30% of the code that is inside of our repos today…are probably all written by software,” though the comFpany insists these cuts were not driven by AI.

In April, Shopify CEO Tobi Lütke told employees seeking more headcount or resources that they should explain why they “cannot get what they want done using AI.” Meanwhile, Duolingo CEO Luis von Ahn announced plans to replace contract workers with AI as part of the company’s new “AI-first” strategy.

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