JUANA SUMMERS, HOST:
Today, Amazon announced that it will be laying off 14,000 employees. That is about 4% of its workforce. The company says it's part of a larger effort to reduce costs while investing in artificial intelligence. Amazon's move today is part of a broader trend across industries. Companies are betting that they can slow down hiring and maximize profits at the same time. Chip Cutter is a reporter at The Wall Street Journal. He's been keeping an eye on all of this and joins us now. But a note before we begin that Amazon is a financial supporter of NPR. Hi, Chip.
CHIP CUTTER: Hi there.
SUMMERS: Chip, so let's just get into it and start with the news from Amazon today. What can you tell us about their decision to make these cuts?
CUTTER: Well, this is one of many cuts Amazon has made in recent years, and the CEO, Andy Jassy, has made clear that he wants the company to slim down. He wants to cut cost. He wants to find efficiencies. And what this means is more job cuts. This is a company that is looking to lean into artificial intelligence, like so many, and it thinks there's ways to sort of essentially do more with less here. It was interesting, you had one of the company's executives telling employees today in a note that the company would get even stronger, according to her note, by reducing bureaucracy and removing layers, shifting resources. This is what you hear a lot of companies say right now, which is they think they actually can keep doing this, can keep their business growing even with fewer people.
SUMMERS: I mean, this is not just Amazon. You've written that many large companies across a whole lot of industries are doing this. They're cutting jobs. They're reluctant to hire, yet they're still pushing for increased profits and sales. Tell us about how some of these companies are explaining the strategic decision.
CUTTER: Absolutely. It's - and it's really a gamble of the moment to say, can you do this? Can you keep your company humming along, boosting sales, juicing profits, all of that without adding people? And a lot of companies think they can do it. And so it's interesting. You have, you know, JPMorgan Chase's CFO recently told investors that the bank had a, quote, "very strong bias" against having the response to hire more people for any given need. You've seen companies like Goldman Sachs say they want to constrain head count through the end of this year and reduce roles that could be more efficient with AI.
And I think it's also really interesting just to see what Walmart is doing. Walmart is the nation's largest private employer. And it has said it wants to keep its head count roughly flat over the next three years, even as its sales grow. Walmart's CEO, Doug McMillon, was at an event last month where he said it's very clear that AI is going to change literally every job. And I think that's how many executives think right now. They think that AI is going to change so much, and many think that they just will not need to hire as many roles or that they can keep their head counts flat to reflect this new reality.
SUMMERS: So if we set profits aside for a moment, does artificial intelligence and its unpredictability create a logistical problem? I mean, how can companies predict and plan for hiring if the technology is so rapidly changing?
CUTTER: It's really difficult. I mean, it's - a number of HR chiefs have told me that they really can't even think a year out how many roles they might need or what the size of the company should be because this is changing so quickly. And so companies have cut the number of layers. They've cut the number of people. It means people are having to, in some cases, take on the jobs of multiple employees. They're not being promoted. They feel sort of stuck in place. That's made it all harder.
And I think it's also worth noting that some of these tools still have some other issues, that some of these coding assistants and some of these gen AI tools that people are using still don't always produce great work. There's a reason some people call it work slop - that it's just not always totally reliable. And so I think executives are banking on this. They're spending millions to sort of pump AI into their companies, but I think we'll see sort of how this all goes.
SUMMERS: I mean, we've talked a lot about this from the perspective of executives and companies, but I'm just thinking, if I'm listening to this and I'm a worker who's out there looking for a job, or if I'm an employee with an existing job and trying to keep my job, what kind of impact could this trend have on those people?
CUTTER: Well, for one, I think it makes it a lot more difficult for existing employees. You may be sort of expected to do more with fewer people around you to help. Of course, some of these tech tools could make things easier, could reduce some of the sort of drudgery that you have to do throughout the day. But I also think if you're someone who's out of work right now, things have become really difficult. This is a tricky labor market to navigate because a number of the biggest, most prominent employers in the U.S. are now slowing their hiring. Some have said they just essentially don't want to hire right now. And so it can be really tough for people to figure out how they're going to get another new job and what that might look like. And so I just think this is sort of a complicated moment both for existing employees and for those who are trying to find their next job.
SUMMERS: Chip Cutter is a reporter with The Wall Street Journal, where he covers the workplace, management and leadership issues. Thank you so much.
CUTTER: Thank you. Transcript provided by NPR, Copyright NPR.
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