Increasing Use of AI and Workforce Reduction
Artificial intelligence while cutting costs elsewhere. It adds up to a 4% reduction in its workforce. Workers will be offered a chance to look for another job internally. Amazon cited Overhiring during the pandemic for the reductions. For more on this, we’re joined live by tech expert Ahmed, engineering professor at San Jose State University. Ahmed, thank you so much for joining us. We appreciate it. Thank you. I want to start with the fact that, you know, we’re talking about what’s driving these layoffs. Does this have more to do with overhiring during the pandemic or really them relying more on AI?
AI Acceleration in Job Replacement
Well, I mean, the answer to this is mixed, both of them. Number one is the plans for getting rid of some of those jobs is on the play. AI accelerated that because they gave them an option. They give them a replacement for many of the position that has repetitive and very specific task that they can just program, you know, the the AI and can do it. Now just just to understand how how what is the size here? 14,000 is about 4% of the 350,000 corporate jobs at Amazon, and they have over a million total, but they have over a thousand AI tools inside Amazon. Whether it is deployed that mean is used or they are developing that, and they’re using this to replace any kind of jobs that they think that can be done by AI.
Potential Spread Across the Tech Sector
Okay. So what does this signal to us, professor, about the kind of layoffs we we may start to see more broadly across across the tech sector that that are related to the implementation of those AI tools you’re talking about.
Companies Prioritizing Cost Reduction
It’s going to be fast, and it will be a lot of this coming because, you know, companies, they look at improving their bottom line by two things reducing the cost, which is in this case the layoffs and increasing the revenue. So any job that can be done by a computer, it’s a repetitive one. It is something that you can specify. Then that’s going to be at risk. Even programmers, when you talk about basic programing, this can be done with AI. The message here is you have to look at AI as a tool to help you stay at your job, not as a competition. And this is very tough decision for so many people because some of those jobs will never come back.
Impact During the Holiday Season
Yeah. So some of the jobs people help build and create AI and then their jobs get taken away. I’m curious what you think about the fact that we’re heading into the holiday season. This is typically the time of year where companies have a hiring surge to help with the holiday rush. So, realistically, could AI spending actually be put into practice in time for the holiday season?
Economic Pressure on Workers and Holiday Spending
Well, it’s going to be impacted by this because people are losing their jobs this holiday. Buying will be less on their mind. They’re going to try to save money so they can go through the holidays and try to find another job. Now on the other side, we just heard from Amazon that they have three new technologies that are going to make it so fast for the drivers to deliver the products to the consumers so they can sell more. So from one side, when to spend from one side the job, some of the jobs inside the company will be lost because artificial intelligence is used to replace them.
Amazon’s Approach to AI Compared to Competitors
You know, I was reading that Amazon, there’s a lot of concerns with them within the company that they have sort of lagged behind some of the other major tech giants in terms of their development of artificial intelligence tools. Why do you think that is? And is that the is there a ground that is that ground that they can sort of make up?
Focus on Cost Reduction Over AI Innovation
Well, their focus is not on the technical side, like what we have of the artificial intelligence. Like when we have a focus like meta or, you know, OpenAI or Gemini from Google, they’re using it and they are when they spend the money, when they do the research, it’s used for specific things inside the company. I mean, I look at it as what kind of upgrade you have we seen in Alexa that AI can push this product and make it more, you know, in the houses and more used more than asking ChatGPT, that could be a sign that the company is catching up with the wave of AI. We’re not there. They are focusing more on reducing the cost by saying, okay, AI is good, let’s use it to reduce our expenses.
Future Layoffs Expected Across Amazon and Other Companies
How many more cuts do you think could likely be made there at Amazon? I mean, that’s kind of also the big picture question is moving forward, as we see every company try to rely more on AI, do we expect more waves of layoffs to happen in the future?
Layoffs Could Spread Industry-Wide
It’s contagious. You know, one company of the tech will do it. Other companies will start looking at their books and they say, why not us? Now for Amazon, they announced they’re going to cut, you know, about 30,000 jobs. They announced 14,000. So they’re looking for something like close to that number in the near future. And they’re talking about corporate jobs. They’re talking about HR. They’re talking about, you know, warehouses where they can be replaced by robots or can replaced by the AI. Other companies, they always look at that and say, okay, if this company can do it and it’s a tech company, we should do it too, because they know how to use AI and they have their own tools to use AI, and to make sure that it’s going to help the company before they can help their customers.
How Workers Can Stay Relevant
And as we wrap up here, I mean, obviously, a lot of folks here in the Bay area work at at tech companies, maybe not the big ones necessarily, but, you know, they have jobs in this in the tech sector here. How do you think folks should be thinking about their roles as as you know, we see the rollout of AI and thinking about how they can remain relevant at their companies.
Using AI as a Skill, Not Competition
That’s a very good question, Alex. It’s you have to be ahead of the curve. You know, when we talk about something like AI, when we talk about something new in the artificial intelligence, you have to know that and use it as a helper, not as a replacement to your job. You know, I get this question all the time saying, how can I how can I know what what kind of AI I use to help me in my job? My answer to them is ask ChatGPT describe your job and say, how can AI. Help me at my job and start from that point to make sure that AI is not going to replace you. It’s going to be a helper or tool next to you. >>