Amazon's CEO finally spoke out about the company's 14,000 job cuts earlier this week, claiming the cuts were not motivated by financial reasons at all.
Speaking on the company's quarterly earnings call Thursday, CEO Andy Jassy said the employees were fired because of a culture mismatch and nothing more.
“The announcement we made a few days ago wasn't really financially driven or even really AI driven, at least not right now,” he said of the layoffs. “It's culture.”
This week's layoffs mainly affect middle managers, with Jassy saying in a June memo that Amazon would need fewer workers due to “efficiency gains” brought about by artificial intelligence. In a separate memo announcing this week's layoffs, Amazon's senior vice president of people said the cuts were to accommodate “transformative technology.”
Jassy also mentioned that Amazon's business has been growing over the past few years. The company has a total number of employees of approximately 1.55 million, of which 350,000 are corporate employees alone. As of December 2019, before the outbreak, the company had 798,000 employees, according to filings with the U.S. Securities and Exchange Commission.
“If you grow as fast as we have for several years, the size of the business, the number of employees, the number of locations, the types of businesses, you end up with more employees and more layers than you had before,” he said.
Jassy added that this type of growth could have consequences.
“Sometimes, without realizing it, you can take away the ownership of the people who are doing the actual work, who have most of the two-way decision-making that should be made quickly on the front lines,” he said.
An Amazon spokesman declined to comment.
Amazon joins other companies, including Salesforce, Target and Paramount, in laying off thousands of employees in total over the past few months. Federal Reserve Chairman Jerome Powell said this week that several major companies have recently cited artificial intelligence as a reason for hiring pauses or layoffs, adding that the Fed was “watching this situation very carefully.”
To be sure, a study this week by Goldman Sachs investment bankers found that only 11% of corporate clients are actively cutting jobs due to artificial intelligence. By comparison, about one-third of companies in the technology, media and telecommunications category are reducing headcount due to AI.
During the quarterly earnings call, Jassy seemed to echo that sentiment, saying the “technology transformation” currently underway meant the company needed to remain nimble and adaptable.
“It’s important to be lean, it’s important to be flat, it’s important to move fast,” he said. “That's what we're going to do.”