Copyright Anchorage Daily News
Amazon and Walmart, the nation’s two largest private employers, swelled with hundreds of thousands of new workers in recent years as they battled for larger slices of consumer pocketbooks. Amazon said in 2021 that its workforce had grown to more than 1.6 million people and boasted of being “the largest job-creator in the U.S.” Walmart said last year that plans for 150 new stores would create jobs across the United States. Now the retail giants are changing tack, laying off workers or keeping headcount flat as they pledge to become leaner businesses where artificial intelligence does more of the work. Amazon said this week it would cut 14,000 corporate jobs and saw its stock jump after reporting that sales grew 13 percent in the most recent quarter compared with last year, to $180 billion. (Amazon founder Jeff Bezos owns The Washington Post.) Walmart CEO Doug McMillon warned at a company event in September that AI is set “to change literally every job” and that his workers would have to adapt. Walmart expects to keep its 2.1 million-strong workforce steady for the next three years as it uses AI to evolve employees’ roles, company spokesperson Jimmy Carter said. The companies are leading examples of a mindset shift across corporate America, with chief executives presenting freezing or cutting headcount as a sign of vitality. Some cite new efficiency unlocked by AI, even as economists are still searching for definitive evidence of how tools such as chatbots are changing U.S. productivity. Workforce contraction or stasis have traditionally been seen as indicators that a business or economic sector is struggling or stuck but are now touted by some corporate leaders as signs a venture is on the cutting edge. Other companies are likely to follow Amazon’s and Walmart’s lead, citing efficiency and AI disruption as they make layoffs or temper hiring, according to economists and analysts. “Sometimes companies look for leaders, and when they see something happen with them, they use it as a cue,” said David Smith, a professor of economics at Pepperdine Graziadio Business School. “As more companies move into the AI space, it will put more pressure on others to do it.” Google’s YouTube this week offered U.S. workers voluntary buyouts, saying it was restructuring around AI. Last month, JPMorgan and Goldman Sachs said they planned to slow hiring as they integrate the technology, while Nestlé said it would slash jobs over the next two years as it increased automation. Companies of all kinds are under pressure from investors to talk about AI and its benefits, said Joe Feldman, an analyst at Telsey Advisory Group who covers Amazon and Walmart. “Investors are increasingly interested in how companies are using AI or planning to use it in the future,” he said. Executives can send positive signals to the market by showing they have a strategy and are putting it into action, Feldman said. But Smith added that suggestions by some CEOs that AI alone is driving recent layoffs or hiring freezes are unconvincing. “I see it more as economic conditions creating pressures to cut costs,” he said, even as some firms may also be investing more in AI. “It’s a blended narrative.” U.S. companies have become skittish over hiring this year as changing trade policy has created uncertainty and fears have grown about the strength of consumer spending, with wealthy Americans splashing out while lower-income families cut back. The U.S. economy has continued to grow, in large part because of soaring corporate investment into data centers that power AI software. But when the Federal Reserve cut interest rates this week, it said risks to employment “rose in recent months.” Many tech firms, including Amazon, already slashed their workforces over recent years to correct for overexpansion during the coronavirus pandemic. AI tools from companies such as OpenAI, Google and Amazon have proved hugely popular with businesses and consumers. Workers and managers have embraced them for tasks such as summarizing large documents, drafting emails or exploring large datasets. But definitive evidence of widespread increases in efficiency or productivity is yet to emerge. (The Post has a content partnership with OpenAI.) Executives around the world and across industries expect AI tools to enable businesses to achieve huge growth at the lowest possible cost, research and advisory firm Gartner has found. “The crazy thing we’re seeing is that’s not necessarily happening in real life yet,” said Caroline Walsh, a managing vice president at the firm. Most companies are still in the early stages of adopting the technology, Walsh said. Gartner found that a majority of U.S. layoffs were not related to AI in the first half of 2025, instead flowing from corrections to pandemic-era over-hiring or other internal changes. Amazon has been aggressive about using technology to improve productivity since its founding in 1994. But the company created more than a million jobs as it grew into a giant, hiring workers at fulfillment centers across the United States to package and route orders. As the tech upstart emerged as second only to Walmart in U.S. private sector headcount, the two have competed for customers and workers. Amazon pushed into groceries, and Walmart ramped up its own e-commerce operations. In 2021, the big box retailer said it would hire 20,000 more permanent employees to work in its high-tech logistics facilities. More recently, the tone has shifted. Amazon’s workforce is tens of thousands of people smaller than in 2021, after it joined other tech firms in laying off workers after the pandemic boom in online activity ended and the Fed increased interest rates. Amazon CEO Andy Jassy said in June that he expected to “reduce our total corporate workforce as we get efficiency gains from using AI.” In the same month, the company said it had deployed its 1 millionth robot across its increasingly automated facilities. But on a Thursday earnings call, Jassy said the 14,000 corporate layoffs were “not financially driven or AI driven.” Instead he cited a shift in the company’s culture, saying Amazon’s rapid growth had led to too many layers of management. “With the technology transformation happening right now … it’s important to be lean, it’s important to be flat, and it’s important to move fast,” Jassy said. “That’s what we’re going to do.” Amazon spokesperson Kelly Nantel said the cuts affect “a small percentage of our global team” and that the company will hire 250,000 people to work during the busy holiday period. Amazon has said adding robots to its facilities reduces physical stress on workers and creates higher-skilled openings. Tom Forte, an analyst at Maxim Group, said that since Jassy took over as CEO from Bezos in 2021, he has put more emphasis on the company’s bottom line in addition to focusing on revenue growth. Jassy “seems to run the business by saying we should never lose money but be willing to make less when the investment is meaningful,” Forte said. It could make sense for Amazon to cut expenses like headcount to make room for more investment in the potential promise of AI, Forte said. The company joined other tech giants this week in saying it would spend more on building infrastructure to power the technology next year. McMillon, Walmart’s CEO, said in September at the company’s Opportunity Summit in Bentonville, Arkansas, that he wanted to support workers at a time of uncertainty about the impact of AI on work. “Our goal is to create the opportunity for everybody to make it to the other side,” he said. Carter, the Walmart spokesman, said the company will reduce some roles but expand others. “Over the next three years we expect headcount to remain flat as roles evolve. That’s why we’re providing associates with AI training and pathways to careers that are in high demand, both today and in the future,” he said. Evidence is beginning to emerge that some jobs are already being transformed by AI. Stanford University’s Digital Economy Lab in August said that certain workers are “canaries in the coal mine” of automation, with entry-level jobs becoming scarcer for AI-exposed positions such as software developers and customer service representatives. “We’re in the early stages of the biggest technological revolution of my lifetime … but we’re still early,” said Erik Brynjolfsson, director of the lab. The “canaries suggest that bigger things are on the way.” While executives may feel external pressure to adopt AI and tout the savings, solely focusing on the technology as a cost-cutting measure is shortsighted, Brynjolfsson added. AI’s biggest value lies in using it to create and do things that weren’t possible before, he said, a process that will take companies time to explore. As corporate leaders wait for those more transformational effects to arrive, they can still talk about their hopes for the technology as they grapple with economic uncertainty. “Nobody wants to talk about losing money,” Walsh, of Gartner, said. But “cutting jobs in the service of investing in AI and growing, that’s a more hopeful story.”
