The CEO of Amazon said he yelled out the quiet part. AI is looking for a lot of work. Other bosses may soon follow his lead.
On Tuesday, Andy Jussy said in a memo that employees need to understand “how to be more successful with a poor team,” and that the move towards AI will ultimately “reduce the total corporate workforce.”
With around 1.5 million workers, Amazon is the second largest private employer in the United States. Workplace commentators told Business Insider that Jassy's Candor could encourage other leaders to feel comfortable with their employees and to tell employees who to replace them.
“Cultural Modeling”
Author and certified executive coach Marlo Lyons said Amazon's directness may encourage other companies to follow suit.
“I think if there are big companies talking about AI, it makes it easier for small businesses to talk about AI. This is basically cultural modeling,” she told BI.
“In a way, that may scare you, but at the same time, you should say, 'OK, at least my company is honest with me,'” Lions said.
Other CEOs are also becoming more and more transparent about AI expectations, but few have explicitly said they would reduce the existing workforce.
Shopify CEO TobiLütke In an April memo, “Using AI is now a baseline expectation,” and before managers hire, they must first prove that AI can't do their job well.
Klarna CEO Sebastian Siemiatkowski said Fintech had halted employment in December last year.
Meanwhile, Openai CEO Sam Altman Earlier this month, AI agents said they have already begun to act like junior-level colleagues and could soon be able to offer business solutions.
“It sends a tremble behind employees,” said Cary Cooper, professor of organizational psychology and health at Manchester Business School in the UK at Jassy Memo. “I think we can talk with senior management about how HR will deal with this. This is the implementation of AI in our business.”
Cooper warned that businesses should be specific to which jobs could be affected, what retraining opportunities are available, or risking “unfortunate sales.”
“Amazing scapegoat”
Thomas Roule, professor of organizational sociology and leadership at Cambridge University, told BI that linking layoffs with AI and AI is nothing new, even if Jassy's openness felt like a turning point.
Related Stories
Business Insider tells the innovative stories you want to know
Business Insider tells the innovative stories you want to know
“Companies don't hesitate to use AI as a reason to shrink, whether it's an excuse or an opportunity,” he said. “Very often, they shrink due to market pressure before they think of something to replace AI.”
“AI is a great scapegoat for many unpopular strategic choices at this point,” Roule added.
“There is a lot of pressure on showing businesses that they can replace their employees with AI tools,” said Peter Capelli, a professor at Wharton School's management team. “But the evidence shows that it's very difficult to do so.”
For example, Klarna made headlines in 2022 when the company fired 700 employees, mostly customer service agents, in support of AI. In May, financial services companies had to hire some back to improve their services.
In Roulet's view, many companies that have already cut jobs in favor of AI have been moving too much.
“Unfortunately, many companies are involved in such reductions before they think about reducing their workforce and are involved in such reductions before they think about AI alternatives,” Roulet said. “The reality is that incorporating AI into your work requires a lot of learning cycles and trial and error. You can't see it clearly overnight.”
