Chamath Palihapitiya, the Canadian-American venture capitalist, has expressed skepticism regarding Amazon’s rationale for its recent layoffs. He argues that the extensive job cuts cannot be attributed to artificial intelligence, but rather are indicative of long-standing hiring misjudgments that the company is now confronting.
On Tuesday, Amazon initiated its first phase of layoffs, eliminating approximately 14,000 positions, shortly after Reuters revealed a broader plan that could see 30,000 employees let go. CEO Andy Jassy has suggested that the company’s growing dependence on artificial intelligence may precipitate additional workforce reductions in the forthcoming months.
Billionaire Investor Challenges AI Layoff Narrative
In a post on X (formerly Twitter) on Tuesday, Palihapitiya contended that the company’s decision to cut 30,000 corporate roles is “not AI job loss,” but rather reflects “the unwinding of the DEI-fueled hiring bonanza of the past decade.”
He pointed out that many positions created under Diversity, Equity, and Inclusion (DEI) initiatives were based on “fragile pretenses” and “immutable traits,” rather than pure talent. “Non-obvious take: this is not an AI job loss. This is the unwinding of the DEI-fueled Hiring Bonanza of the past decade,” he articulated on X.
Non obvious take: this is not AI job loss. This is the unwinding of the DEI-fueled Hiring Bonanza of the past decade.
Many jobs in that period were created under fragile pretenses / immutable traits. Ie, things other than talent.
But eventually the chickens come home to roost.… https://t.co/ByMJClU9B6
— Chamath Palihapitiya (@chamath) October 28, 2025
“But eventually the chickens come home to roost,” he noted, implying that Amazon’s workforce has become “bloated and inefficient.”
Palihapitiya contended that the term AI has been misappropriated as a convenient rationale for workforce reductions, labeling it a “scapegoat” for media narratives that overlook the fundamental issues.
“AI” serves as an easy cover for commentators attempting to identify a scapegoat, but, in his estimation, it does not represent the underlying cause.
Amazon’s Significant Workforce Reductions Extend Beyond Corporate Layoffs
Last week, Amazon announced its intention to decrease its global workforce by nearly half a million positions. Under CEO Andy Jassy’s leadership, the company has suggested an escalated reliance on automation, AI systems, and robotics to enhance operational efficiency. Currently, Amazon employs approximately 1.56 million individuals worldwide.
Earlier in July, Amazon had already reduced several hundred jobs within its AWS cloud division. At that juncture, CEO Jassy had explicitly connected these job cuts to advancements in artificial intelligence, noting that the company’s escalating use of automation is altering team functionalities.
According to Layoffs. fyi, which tracks substantial layoffs, around 218 technology companies have enacted workforce reductions in 2025, resulting in a loss of 112,732 tech jobs. Most of these companies attribute these eliminations to AI and cost-containment strategies.
While industry leaders have cautioned about the potential for AI to replace human labor, few anticipated the accelerated pace of these changes.
Cathie Wood, CEO of Ark Invest, warned of the adverse effects AI could have on entry-level positions, noting that the unemployment rate among recent college graduates has spiked from 4% to 6.3%.
Goldman Sachs economists also highlighted a significant decline in employment rates among younger tech workers since 2022, directly correlated with the emergence of generative AI tools like ChatGPT.
Their analysis indicates that joblessness among Americans aged 20–30 has surged by 3 percentage points since 2024, approximately four times the overall increase in the U.S. unemployment rate.
Source link: Financialexpress.com.
