The one certainty N. Lee Plumb has about losing his job at Amazon last week is that it had nothing to do with a lack of engagement with artificial intelligence.
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Plumb, who led his team’s “AI enablement” efforts, said he was among the company’s most active users of Amazon’s new AI coding tools — so much so that he was flagged internally as a top performer.
Still, Amazon’s announcement last week of 16,000 corporate layoffs led many to link the job cuts to CEO Andy Jassy’s stated goal of reducing headcount by gaining efficiencies through widespread AI adoption.
In a statement, the company said the changes were aimed at strengthening teams by reducing layers, increasing ownership and cutting bureaucracy to improve speed and accountability.
Plumb’s case stands out in part because he is also running what he calls a long-shot congressional campaign in Texas, focused on opposing the tech industry’s reliance on work visas, which he argues are used to replace American workers with lower-cost foreign labour.
Regardless of the circumstances behind his layoff, Plumb’s scepticism about AI-driven job losses is shared by many economists.
“We just don’t know,” said Karan Girotra, a management professor at Cornell University. He noted that while AI can significantly boost productivity, many of the gains tend to benefit individual employees rather than immediately reducing an organisation’s workforce.
Girotra added that even if AI helps people work faster, companies need time to adjust management structures before they can realistically operate with fewer employees. In Amazon’s case, he believes the layoffs are more likely linked to scaling back after heavy hiring during the Covid-19 pandemic.
A Goldman Sachs report similarly found that AI’s overall impact on the labour market remains limited, though it could affect certain occupations such as marketing, graphic design, customer service and technology roles — areas closely aligned with current generative AI capabilities.
The bank’s latest AI adoption tracker said that, since December, very few employees had been affected by layoffs explicitly attributed to AI. However, the report was published before Amazon, Dow and Pinterest announced their most recent job cuts.
Pinterest was among the most direct in linking layoffs to AI, saying it was making organisational changes to support an AI-focused strategy, including hiring AI-proficient talent. The company said this shift led to the decision to cut up to 15% of its workforce.
Expedia has expressed similar messaging, though some of the 162 tech roles it cut in Seattle included AI-related positions. Dow, meanwhile, cited AI and automation as part of a strategy tied to productivity gains and shareholder returns when announcing 4,500 layoffs.
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Amazon’s 16,000 corporate layoffs are part of a broader workforce reduction. The company also said it would cut about 5,000 retail roles following the closure of most Amazon Go and Amazon Fresh stores, adding to more than 30,000 job cuts since October.
Like many tech companies — particularly those developing and selling AI tools — Amazon has been urging employees to find efficiencies using AI. Meta CEO Mark Zuckerberg said last week that AI will begin dramatically changing how people work by 2026, allowing smaller teams or even individuals to complete projects that once required large groups.
Despite Amazon’s strong push for AI adoption, Plumb said he was fully aligned with the company’s direction, using its AI coding tool, Kiro, to address major challenges in the compensation system.
“If you weren’t using it, your manager would know,” he said, adding that only a handful of employees surpassed his usage and milestones.
Now, Plumb is focusing on his congressional bid in Texas, challenging incumbent US Representative Dan Crenshaw.
Girotra said AI may be contributing to reductions in middle management, but ultimately believes most layoffs are driven by cost-cutting rather than technology alone.
Other companies have been careful not to cite AI as a factor. Home Depot recently confirmed it was cutting 800 corporate roles, saying the move was about speed and agility, not automation. Peloton also announced an 11% workforce reduction as part of broader cost-cutting efforts.
For employees and economists alike, it remains difficult to determine whether AI is truly driving layoffs or whether it has become a convenient narrative for companies seeking to reassure investors.
“AI has to deliver a return on investment,” said Plumb. “When you cut headcount, it looks like efficiency, attracts capital and boosts share prices. You could have been overstaffed to begin with, cut jobs, and then credit AI for the move.”
Amazon, in an emailed statement, said AI was not the reason behind the vast majority of its recent workforce reductions.
– AP
–Thestar