The era of large-scale layoffs due to artificial intelligence has arrived in the United States

Amazon recently announced in a memo that it will lay off 14,000 employees, citing artificial intelligence (AI) technology as the primary reason. This news kicks off a series of layoffs that are expected to ultimately affect up to 30,000 jobs. CEO Andy Jassy had hinted at this as early as June, stating that AI capabilities would enable Amazon to reduce its white-collar workforce in the future. However, he limited this future to "the next few years."

First, an obvious factor not mentioned in the announcement is Amazon's position in the increasingly fierce AI race. It is striving to catch up with Microsoft and Google's cloud businesses, both of which are growing faster than Amazon. To recruit more AI experts and build more data centers, Amazon needs to quickly release significant funds. Executives believe they don't have time to take their time and wait for years.

Amazon's official statement is that AI "enables businesses to innovate at an unprecedented pace." A human resources executive explained that this is why the company needs to "lean up its organizational structure, reduce layers, and strengthen accountability to grow as quickly as possible." While the tech industry has long touted the advantages of lean teams, large corporations still require a significant workforce to function; massive layoffs could overwhelm the remaining staff. With the increasing capabilities of artificial intelligence, executives seem less concerned about this issue.

Secondly, more companies will undoubtedly follow Amazon's lead. In an industry that prides itself on innovation, imitation among tech companies is commonplace: In late 2022, Meta's announcement of approximately 11,000 layoffs triggered a massive wave of layoffs in Silicon Valley, resulting in over 250,000 job losses in 2023 and spreading to other businesses across the US. Amazon's move this week gives CEOs an excuse to conduct massive layoffs with impunity, even with billions of dollars in cash reserves. Whether CEOs are truly willing to undertake such large-scale layoffs or not, investors will push for it, especially given that Amazon's decision could give it an edge in the AI ​​race.

However, there is a world of difference between a slowdown in hiring and laying off an entire city's workforce in a single day. Daron Acemoglu, a Nobel laureate in economics from MIT and a leading expert on technological change, stated, "For simple record-keeping tasks, AI is already performing on par with humans, but beyond that, we still need AI to make further progress to handle the extreme situations that are critical for many office workers." Furthermore, the pace of this change should be a cause for concern in the United States. If automation proceeds slowly, there will be time to adapt. Employees can re-evaluate their soon-to-be-obsolete professions and learn new skills. Schools can adjust their curricula, and voters can debate, organize, and push for safeguards for elected officials to implement.

Currently, what we see at Amazon is chaos. According to Reuters, approximately 30,000 Amazon employees are about to join the competition for already shrinking white-collar jobs. And as other companies follow Amazon's model, the market for unemployed professionals will only become more crowded. Will these employees be able to find similar jobs, or will they have to find other ways to make a living? Will they be able to retain their current salaries, or will they face significant pay cuts that severely impact their earning potential in the coming years? These are just the first of many challenges facing unemployed Amazon workers today, and Americans will face similar problems in the coming months and years.