(qlmbusinessnews.com . Wed 29th Oct, 2025) London, UK —
Artificial Intelligence Sparks Massive Layoffs in Major Tech Firms
This week, Amazon's decision to cut several thousand corporate positions has reignited fears over the impact of Artificial Intelligence (AI) on the job market. The retail giant is the latest in a series of US companies attributing layoffs to advancements in AI technology.
Chegg, an online learning platform, reduced its workforce by 45% on Monday, citing “the new realities” of AI. Last month, Salesforce eliminated 4,000 customer service jobs, with the CEO attributing the cuts to the efficiency of AI agents. UPS also announced a reduction of 48,000 positions since last year, with its CEO noting the role of machine learning in these layoffs.
However, experts like Martha Gimbel, Executive Director of the Budget Lab at Yale University, urge caution in directly linking these layoffs to AI. Gimbel argues that company-specific factors often play a significant role and warns against overreacting to individual corporate announcements.
While certain job sectors, such as recent graduates and data centre workers, may be more susceptible to AI disruptions, the overall picture is mixed. A study by the Federal Reserve Bank of St Louis found a correlation between AI prevalence and unemployment in some occupations since 2022. Conversely, Morgan Frank, an assistant professor at the University of Pittsburgh, noted that the only significant impact observed following the launch of the ChatGPT by OpenAI was on office and administrative support roles, with no notable effect on computer and maths occupations.
The broader tech industry had experienced a hiring boom in the lead-up to and during the early stages of the coronavirus pandemic, partly stimulated by near-zero US interest rates. This boom set the stage for eventual workforce reductions, a dynamic that experts argue is separate from the recent focus on generative AI.
With the Federal Reserve raising interest rates around the time ChatGPT was introduced, the economic context has indeed shifted. Nevertheless, Gimbel suggests that the current patterns of hiring and firing do not deviate significantly from typical economic cycles, and the real test will come when the economy enters a phase of strong growth.
Looking ahead, distinguishing between cyclical job losses and those directly attributed to AI will be crucial, particularly if the US economy faces a recession, impacting jobs in human resources and marketing, sectors also vulnerable to AI.
Amazon's recent announcement of cutting approximately 14,000 corporate roles underscores its intention to operate more efficiently in the face of AI opportunities. Despite this, the company has reported strong financial performance, including a 13% year-over-year sales increase to £125 billion.
Enrico Moretti, an economics professor at the University of California, Berkeley, points out that major tech firms like Amazon are leading the way in AI-driven layoffs due to their dual role as both creators and users of AI technologies. Lawrence Schmidt, an Associate Professor of Finance at the MIT Sloan School of Management, also highlighted Amazon's unique position to automate jobs more rapidly than its competitors.
As the dust settles, the need for job reallocation appears inevitable, regardless of the overall impact on job numbers, marking a pivotal moment in the ongoing integration of AI into the corporate world.
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