In the wake of an Amazon Web Services shortage a new report indicates that the tech giant is on the path to ramp up automation and avoid filling more than 160,000 jobs with actual human employees.
This report from The New York Times said that Amazon – a company that has grown over the past two decades to become the nation’s second-largest employer with 1.2 million employees – plans to automate 75% of its operations. It cited “interviews and a cache of internal strategy documents.”
“In its ascent to become the nation’s second-largest employer, it has hired hundreds of thousands of warehouse workers, built an army of contract drivers and pioneered using technology to hire, monitor and manage employees,” said The Times of Amazon.
If its reported automation plans go forward, Amazon would sidestep hiring more than 160,000 people in the U.S. that it would have needed by 2027. According to The Times, this shift would equate to about 30 cents saved on “each item that Amazon picks, packs and delivers to customers.”
Amazon leadership has already hinted that it plans to scale back on human workers as it invests more in artificial intelligence technology, as Audacy reported in June.
Andy Jassy, CEO of Amazon, has said Amazon expects to “need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs,” but that “in the next few years, we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company.”
Earlier this month, Fortune reported that Amazon was planning a wave of layoffs, including 15% of its human resources staff.
Bureau of Labor Statistics jobs report data from August showed that the U.S.
unemployment overall had reached a four-year high. This month, the Bank of America Institute said its internal data suggests there was a continued slowing in employment growth and rising unemployment claims in September.
Indeed, Amazon isn’t the only company or institution that seems to be cutting back on its human workforce. Audacy reported this August on research that found a 13% relative decline in employment among early career workers in AI-exposed occupations such as software and customer service. There have also been recent reports of mass layoffs at Paramount Skydance and the U.S. Department of the Interior.
In September, the Harvard Business Review weighed in on whether deleting human jobs, specifically entry-level jobs – in favor of AI or automation is really a good move.
“We believe slashing entry-level jobs simply to cut costs is dangerously short-sighted – both for companies and society,” it said. “There is a strong case to be made that organizations must resist the temptation to eliminate them en masse; instead, they should redesign them.”