The CEO of Amazon has just said the calm part aloud: AI comes for many jobs – and other bosses could soon follow his example.
On Tuesday, Andy Jassy said in a memo that employees should find “how to do more with the Scrappier teams” and that the passage to AI “would ultimately reduce our total workforce”.
Amazon, with around 1.5 million workers, is the second largest private employer in the United States. Midfielder commentators told Business Insider that Jassy’s franchise could encourage other leaders to feel comfortable saying their employees who – or what will replace them.
“Culture modeling”
Marlo Lyons, certified author and executive coach, said that the Amazon directive could encourage other companies to follow suit.
“I think that if you have a large company that talks about AI, then it facilitates companies to talk about AI-it is essentially the modeling of culture,” she told Bi.
“In some respects, it could scare you, but at the same time, it should make you say:” OK, at least my business is honest with me “,” said Lyons.
Other CEOs have also become increasingly transparent on AI expectations, although little explicitly declared that this would reduce their existing workforce.
CEO of Shopify Tobi Lütke said in a memo in April that “the use of AI is now a reference expectation” and that the managers are not smooth, they must first prove that AI could not do the work better.
Klarna CEO Sebastian, Siemiatkowski, said in December of last year that the Fintech had stopped hiring because “AI can already do all the work that we, as humans, do”.
Meanwhile, CEO of Openai Sam Altman said IA agents earlier this month already started to act as junior level colleagues and could soon be able to provide commercial solutions.
“This will send chills in the back of employees,” said Cary Cooper, professor of organizational psychology and health at the Manchester Business School in the United Kingdom, of the note note. “I think it will open it so that HR now has discussions with senior management on how we manage this – the introduction of AI into our business.”
Cooper has warned that companies should be specific to the staff of which jobs could be affected and available recycling possibilities, or risks of “regrettable turnover” – lose the talent they want to keep most.
‘Great scapegoat’
Thomas Roulet, professor of sociology and organizational leadership at the University of Cambridge, told Bi that linking the dismissals at AI was not new – even if the opening of Jassy looked like a turning point.
“Companies do not hesitate to use AI as a reason to reduce size, whether it is an excuse or an opportunity,” he said. “Very often, they reduce the size before they even think what they will replace with AI, due to market pressures.”
“AI is an excellent scapegoat for many unpopular strategic choices for the moment,” added Roulet.
“There is enormous pressure on companies to show that they are able to replace employees with AI tools,” said Bi Peter Cappelli, management teacher at Wharton school. “But the evidence indicates that it is very difficult to do so.”
Klarna, for example, made the headlines in 2022 when the company dismissed 700 employees, mainly customer service agents, in favor of AI. In May, the financial services company had to hire some to improve its services.
In the opinion of Roulet, many companies that have already eliminated jobs in favor of the AI were too quickly.
“Unfortunately, many companies are thinking of reducing the workforce and engaging with such reductions before even thinking about replacing AI,” said Roulet. “The reality is that the implementation of AI in AI takes a lot of learning and testing cycles and errors – it does not seem clear overnight.”
