Amazon laid off 16,000 people last week because of what CEO Andy Jassy said were "efficiency gains" from artificial intelligence (AI), but economists say it's hard to know whether the technology is the real reason for job losses.
“We just don't know,” said Karan Girotra, a professor of management at Cornell University's business school, when asked if people are really losing their jobs to AI.
American investment firm Goldman Sachs said in its monthly AI adoption tracker that, since December 2025, "very few employees were affected by corporate layoffs attributed to AI." The report was published in mid-January, before subsequent AI-related layoffs at Amazon, travel giant Expedia and social media platform Pinterest were announced.
The Goldman Sachs report found that AI's overall impact on the labour market remains limited, though some effects might be felt in fields where AI can do many of the main work tasks, such as writing emails, marketing pitches, producing synthetic images, answering questions, and helping write code.
Still, Girotra said it takes time to adjust a company's management structure in a way that would enable a smaller workforce when it is integrating AI.
“It requires a lot of adjustment and most of the gains accrue to individual employees rather than to the organisation," he added, noting that most employees save time and get their work done earlier when using AI.
If any jobs are being lost to AI, Girotra said it's likely middle management positions that are being axed to "cut costs."
"I don't think they care what the reason for [the job cuts] are," he added.
Amazon layoffs are likely scaling back COVID-19 era hires
Amazon's 16,000 corporate job cuts are part of a broader reduction of employees at the e-commerce giant. The company said it was also cutting about 5,000 retail workers from on-location stores in the United States.
Last October, another 14,000 employees lost their jobs since Jassy first signalled a push for AI-driven organisational changes.
Girotra said Amazon is still likely scaling back from a glut of hiring during the COVID-19 pandemic.
“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.
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.”
