The only thing N. Lee Plumb knows for sure about being fired from Amazon last week is that it wasn’t a failure to join the company. artificial intelligence plans
Plumb, his team’s head of “AI enablement,” says he was so prolific in using Amazon’s new AI coding tool that the company marked him as one of its top users.
Many took on Amazon’s 16,000 companies announced layoffs Last week it reflected CEO Andy Jassy’s push to “reduce our total corporate workforce as we realize efficiency gains with the extensive use of AI across the enterprise.”
But like other companies that have linked workforce changes to AI, including Expedia, Pinterest i Dow Last week, it may be difficult for economists or individual employees like Plumb to know whether artificial intelligence is the real reason for layoffs or whether it’s the message a company wants to tell Wall Street.
“AI has to generate a return on investment,” said Plumb, who worked at Amazon for eight years. “When you reduce the number of people, you’ve demonstrated efficiency, you attract more capital, the share price goes up.”
“So potentially you could have been inflated in the first place, reduce the number of people, attribute it to AI and now you have a story of value,” he said.
Amazon said in an emailed statement that AI “was not the reason for the vast majority of these reductions.”
“These changes are about continuing to strengthen our culture and our teams by reducing layers, increasing ownership and helping to reduce red tape to drive speed and ownership,” he said.
Plumb is atypical for an Amazon worker in that he is also running what he describes as a “long-term” bid 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-driven job replacement is shared by many economists.
“We don’t know,” said Karan Girotra, a professor of management 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 accrue to individual employees rather than the organization. People save time and get their work done sooner.”
If an employer is working faster because of AI, Girotra said it takes time to adjust a company’s management structure in a way that allows for a smaller workforce. He’s not convinced that will happen at Amazon, which he said is still reeling from a hiring glut during the COVID-19 pandemic.
A Goldman Sachs report said the overall impact of AI on the labor market remains limited, although some effects could be felt in “specific occupations such as marketing, graphic design, customer service and especially technology.” These are fields that involve tasks that correlate with the strengths of the current crop of generative AI chatbots that can write emails and marketing pitches, produce synthetic images, answer questions and help write code.
But the bank’s economic research division said in its most recent monthly tracking of AI adoption that since December, “very few employees were affected by corporate layoffs attributed to AI,” even though the report was released on Jan. 16, before Amazon, Dow and Pinterest announced their layoffs.
San Francisco-based Pinterest was the most outspoken in stating that AI prompted it to cut up to 15% of its workforce. The social media company said it was “making organizational changes to continue to develop our AI advancement strategy, which includes hiring AI-savvy talent. As a result, we’ve made the difficult decision to let go of some of our team members.”
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 has issued 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 linked its 4,500 layoffs to a new plan “that uses AI and automation” to boost productivity and improve shareholder returns.
Amazon’s 16,000 job cuts were part of a broader downsizing at the e-commerce giant. Along with those cuts, which are believed to be back-office jobs, Amazon said it would cut about 5,000 retail workers, according to notices it sent to state workforce agencies in California, Maryland and Washington, as a result of its decision to close almost all its Amazon Go and Amazon Fresh stores.
This is on top of a round of 14,000 job cuts in October, bringing the total to more than 30,000 since Jassy first signaled a push for AI-driven organizational changes.
Like many companies, in tech and otherwise, but especially those that make and sell AI tools and services, Amazon has been pushing its workforce to find more efficiencies with AI.
Meta CEO Mark Zuckerberg said last week that 2026 will be when “AI starts to dramatically change the way we work.”
“We’re investing in native AI tools so people at Meta can do more, we’re elevating individual contributors and flattening teams,” he said on an earnings call. “We’re starting to see projects that used to require large teams now being carried out by a single, very talented person.”
So far, Meta’s layoffs this year have focused on cutting jobs from its virtual reality and metaverse divisions. It also drives job impacts as the industry shifts resources to AI development, which requires heavy spending on computer chips, power-hungry data centers and talent.
Jassy told Amazon employees last June to be “curious about AI, get educated, attend workshops and trainings, use and experiment with AI whenever you can, participate in your team’s brainstorming sessions to figure out how to invent for our customers faster and more expansively, and how to do more with smaller teams.”
Plumb strongly agreed with this, saying that he demonstrated his competence in using Amazon’s AI coding tool, Kiro, to “solve massive problems” in the company’s compensation system.
“If you didn’t use them, your manager would get a report and you’d be told about the usage,” he said. “There were only five people in the entire company who were a bigger user of Kiro than me, or who had achieved more milestones.”
Now he’s shifting gears in his bid 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 the increased productivity of artificial intelligence will lead companies to cut back on middle management, but he said the reality is that those making layoff decisions “just have to cut costs and make it happen. That’s it. I don’t think they care what the reason for it is.”
Not all companies cite AI as a reason for the cuts. Home Depot confirmed Thursday that it was eliminating 800 roles tied to its corporate headquarters in Atlanta, though most of the affected employees were working remotely.
Home Depot spokesman George Lane said Home Depot’s cuts were not driven by artificial intelligence or automation, but “really about speed, agility” and serving the needs of its customers and frontline workers.
And exercise equipment maker Peloton confirmed on Friday that it is cutting its workforce by 11% as part of a wider cost-cutting measure to lower operating expenses.
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AP retail writer Anne D’Innocenzio contributed to this report.
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