Did artificial intelligence really drive layoffs at Amazon and other
firms? It can be hard to tell
[February 02, 2026] By
MATT O'BRIEN
The one thing N. Lee Plumb knows for sure about being laid off from
Amazon last week is that it wasn’t a failure to get on board with the
company’s artificial intelligence plans.
Plumb, his team’s head of “AI enablement,” says he was so prolific in
his use of Amazon’s new AI coding tool that the company flagged him as
one of its top users.
Many assumed Amazon's 16,000 corporate layoffs announced last week
reflected CEO Andy Jassy’s push to “reduce our total corporate workforce
as we get efficiency gains from using AI extensively across the
company.”
But like other companies that have tied workforce changes to AI —
including Expedia, Pinterest and Dow last week — it can be hard for
economists, or individual employees like Plumb, to know if AI is the
real reason behind the layoffs or if it's the message a company wants to
tell Wall Street.
“AI has to drive a return on investment,” said Plumb, who worked at
Amazon for eight years. “When you reduce head count, you’ve demonstrated
efficiency, you attract more capital, the share price goes up.”
“So you could potentially have just been bloated in the first place,
reduce head count, attribute it to AI, and now you’ve got a value
story,” he said.
Plumb is atypical for an Amazon worker in that he's also running what he
describes as a “long shot” bid for Congress in Texas, on a platform
focused on stopping the tech industry's reliance on work visas to
“replace American workers with cheaper foreign labor.”
But whatever it was that cost Plumb his job, his skepticism about
AI-driven job replacement is one shared by many economists.
“We just don't know,” said Karan Girotra, a professor of management at
Cornell University's business school. “Not because AI isn’t great, but
because it requires a lot of adjustment and most of the gains accrue to
individual employees rather than to the organization. People save time
and they get their work done earlier.”
If an employer works faster because of AI, Girotra said it takes time to
adjust a company's management structure in a way that would enable a
smaller workforce. He's not convinced that's happening at Amazon, which
he said is still scaling back from a glut of hiring during the COVID-19
pandemic.
A report by Goldman Sachs said AI's overall impact on the labor market
remains limited, though some effects might be felt in “specific
occupations like marketing, graphic design, customer service, and
especially tech.” Those are fields involving tasks that correlate with
the strengths of the current crop of generative AI chatbots that can
write emails and marketing pitches, produce synthetic images, answer
questions and help write code.
But the bank's economic research division said in its most recent
monthly AI adoption tracker that, since December, “very few employees
were affected by corporate layoffs attributed to AI,” though the report
was published Jan. 16, before Amazon, Dow and Pinterest announced their
layoffs.
San Francisco-based Pinterest was the most explicit in asserting that AI
drove it to cut up to 15% of its workforce. The social media company
said it was “making organizational changes to further deliver on our
AI-forward strategy, which includes hiring AI-proficient talent. As a
result, we’ve made the difficult decision to say goodbye to some of our
team members.”
Pinterest echoed that message in a regulatory disclosure that said the
company was “reallocating resources to AI-focused roles and teams that
drive AI adoption and execution."
Expedia has voiced a similar message but the 162 tech workers the travel
website cut from its Seattle headquarters last week included several
AI-specific roles, such as machine-learning scientists.
Dow's regulatory disclosures tied its 4,500 layoffs to a new plan
“utilizing AI and automation” to increase productivity and improve
shareholder returns.
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The Amazon logo is displayed at a news conference in New York on
Sept. 28, 2011. (AP Photo/Mark Lennihan, File)
 Amazon's 16,000 corporate job cuts
were part of a broader reduction of employees at the ecommerce
giant. At the same time as those cuts, all believed to be office
jobs, Amazon said it would cut about 5,000 retail workers, according
to notices it sent to state workforce agencies in California,
Maryland and Washington, resulting from its decision to close almost
all of its Amazon Go and Amazon Fresh stores.
That's on top of a round of 14,000 job cuts in October, bringing the
total to well over 30,000 since Jassy first signaled a push for
AI-driven organizational changes.
Like many companies, in technology and otherwise, but particularly
those that make and sell AI tools and services, Amazon has been
pushing its workforce to find more efficiencies with AI.
Meta CEO Mark Zuckerberg said last week that 2026 will be when “AI
starts to dramatically change the way that we work.”
“We’re investing in AI-native tooling so individuals at Meta can get
more done, we’re elevating individual contributors, and flattening
teams,” he said on an earnings call. “We’re starting to see projects
that used to require big teams now be accomplished by a single very
talented person.”
So far, Meta’s layoffs this year have focused on cutting jobs from
its virtual reality and metaverse divisions. Also driving job
impacts is the industry shifting resources to AI development, which
requires huge spending on computer chips, energy-hungry data centers
and talent.
Jassy told Amazon employees last June to be “curious about AI,
educate yourself, attend workshops and take trainings, use and
experiment with AI whenever you can, participate in your team’s
brainstorms to figure out how to invent for our customers more
quickly and expansively, and how to get more done with scrappier
teams.”
Plumb was fully on board with that and said he demonstrated his
proficiency in using Amazon's AI coding tool, Kiro, to “solve
massive problems” in the company's compensation system.
“If you weren’t using them, your manager would get a report and they
would talk to you about using it,” he said. “There were only five
people in the entire company that were a higher user of Kiro than I
was, or had achieved more milestones.”
Now he's shifting gears to his candidacy among a field of
Republicans in the Houston area looking to unseat U.S. Rep. Dan
Crenshaw in the March primary.
Cornell's Girotra said it's possible that increasing AI productivity
is leading companies to cut middle management, but he said the
reality is that those making layoff decisions “just need to cut
costs and make it happen. That’s it. I don't think they care what
the reason for that is.”
Not all companies are signaling AI as a reason for cuts. Home Depot
confirmed on Thursday that it was eliminating 800 roles tied to its
corporate headquarters in Atlanta, though most of the affected
employees worked remotely.
Home Depot’s spokesman George Lane said that Home Depot’s cuts were
not driven by AI or automation but “truly about speed, agility” and
serving the needs of its customers and front-line workers.
And exercise equipment maker Peloton confirmed on Friday that it is
reducing its workforce by 11% as part of a broader cost-cutting move
under its CEO Peter Stern to pare down operating expenses.
——
AP Retail Writer Anne D’Innocenzio contributed to this report.
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