Amazon announced this week it will eliminate 14,000 positions, citing artificial intelligence as a key driver. The company joins a growing list of major firms blaming AI for workforce reductions. But experts and surveys suggest the technology’s promised cost savings remain unclear.
Companies Point to AI for Cuts
According to NBC News, Amazon Senior Vice President Beth Galetti called AI the most transformative technology since the internet. The company said AI enables much faster innovation. But an Amazon representative later downplayed AI’s role. The representative said AI was not behind the vast majority of job cuts. Instead, the company focused on reducing management layers and strengthening teams.
Other companies also cite AI when cutting staff. Walmart plans to keep headcount flat over several years because of AI. Goldman Sachs reduced human roles that AI could perform. Salesforce cut 4,000 workers, pointing to AI benefits and efficiencies. Meta eliminated 600 AI unit roles over concerns about bloat. Microsoft announced three separate rounds of layoffs this year to fund AI investments.
What Experts Say
David Autor, an economics professor at MIT, wrote in an email that companies find it easier to blame AI than admit financial problems. He said firms would be wise to credit AI whether or not it was the real reason. Autor studies AI’s impact on workers.
Returns on AI Remain Elusive
Recent studies show limited productivity gains from AI so far. Boston Consulting Group surveyed 1,250 firms in September. The report found 60% saw minimal revenue and cost gains from substantial AI investment. A Deloitte survey showed only 10% of organizations got significant returns from AI systems that make decisions.
A Wharton School report found more U.S. companies are using and investing in AI than ever. But results are mixed. Stefano Puntoni, a Wharton faculty member and study author, noted that saving 20 minutes on an email will not create major breakthroughs.
Many companies announcing AI-driven layoffs face financial pressure. Amazon shares sit 6% below their January record. Salesforce stock dropped 29% from its December 2024 high. UPS eliminated 34,000 operational roles, a 70% increase from its previous target. The company said automation powered these changes. A UPS spokesperson said AI and robotics make jobs safer and reduce repetitive tasks.
