Amazon expects to cut corporate jobs as it relies more on AI
Jassy made this statement during Amazon's re:MARS conference in Las Vegas. The company has been investing heavily in AI technology for various applications. Amazon has faced criticism in the past for its treatment of workers and labor practices. Jassy's remarks indicate that AI will play a significant role in reshaping the company's workforce.
Amazon's CEO Andy Jassy on Artificial Intelligence
Amazon CEO Andy Jassy said Tuesday that the company expects artificial intelligence "will reduce our total corporate workforce as we get efficiency gains" over time. "We will need fewer people doing some of the jobs that are being done today, and more people do other types of jobs," Jassy added in a memo to Amazon's workforce.
The CEO of the country's second-largest retailer and employer said Amazon is using generative AI "in virtually every corner of the company." Amazon employs more than 1.5 million people worldwide, according to its most recent annual report. This year, Amazon plans to spend $100 billion to expand AI services and data centers that power them, up from $83 billion last year.
Jassy said he believes so-called "A.I. agents" will "change how we all work and live." While "many of these agents have yet to be built," he said, "they're coming, and fast." He continued by saying that they will "change the scope and speed at which we can innovate for customers." Amazon currently has more than a thousand AI services and applications running inside the company or in progress of being built.
Impact of AI on the Workforce
Jassy's comments on Tuesday will likely invoke fears that many corporate workers have had as artificial intelligence captures the eye of efficiency-minded executives across corporate America. A recent study from Bloomberg Intelligence said that AI could replace up to 200,000 banking jobs. Artificial intelligence has also been shown to be effective at coding for software programs. Cybersecurity firm Crowdstrike eliminated 5% of its workforce in May, saying that A.I. was driving "efficiencies across both the front and back office."
Shopify CEO Tobi Lutke said managers at the e-commerce company will be expected to prove why they "cannot get what they want done using A.I." before asking for more headcount. "Having A.I. alongside the journey and increasingly doing not just the consultation, but also doing the work for our merchants is a mind-blowing step function change here," Lutke added.
Language learning firm Duolingo also recently said that it would replace contract workers with artificial intelligence. "We'll gradually stop using contractors to do work that A.I. can handle," CEO Luis von Ahn wrote in a memo to Duolingo employees in May. "Headcount will only be given if a team cannot automate more of their work," von Ahn added.
The CEO of U.K. telecom giant BT said this week that plans to cut 40,000 jobs from the company's workforce over the next 10 years "did not reflect the full potential of A.I."