Amazon CEO Andy Jassy just got brutally honest about AI — and other bosses may follow his lead

• Amazon CEO Andy Jassy told employees that AI will reduce head count as the company gets "scrappier."
• Management commentators say his memo might open the floodgates for more AI job-loss talk.
• Vague AI messaging risks losing top talent, one workplace commentator told BI.

Amazon's CEO just said the quiet part out loud: AI is coming for plenty of jobs — and other bosses may soon follow his lead.

On Tuesday, Andy Jassy said in a memo that employees should figure out "how to get more done with scrappier teams" and that the move toward AI would eventually "reduce our total corporate workforce."

Amazon, with about 1.5 million workers, is the second-largest private employer in the US. Workplace commentators told Business Insider that Jassy's candor may prompt other leaders to feel comfortable telling their employees who — or what — will replace them.

'Culture modeling'

Marlo Lyons, an author and certified executive coach, said Amazon's directness might encourage other companies to follow suit.

"I think if you have a big company that's talking about AI, then it does make it easier for smaller companies to talk about AI — this is basically culture modeling," she told BI.

"In some ways, it might scare you, but at the same time, it should make you say, 'OK, at least my company's being honest to me about it,'" Lyons said.

Other CEOs have also become increasingly transparent about AI expectations, although few have explicitly said it would reduce their existing workforce.

Shopify CEO Tobi Lütke said in a memo in April that "AI usage is now a baseline expectation," and that before managers make a hire, they must first prove that AI couldn't do the job better.

Klarna CEO Sebastian Siemiatkowski said in December last year that the fintech had stopped hiring because "AI can already do all of the jobs that we as humans do."

Meanwhile, OpenAI CEO Sam Altman said earlier this month that AI agents were already beginning to act like junior-level coworkers and may soon be able to deliver business solutions.

"It'll send shivers down the backs of employees," said Cary Cooper, professor of organizational psychology and health at Manchester Business School in the UK, of the Jassy memo. "I think it'll open it up for HR to now have discussions with senior management about how we deal with this — the introduction of AI in our business."

Cooper warned companies should be specific with staff about which jobs might be affected and what retraining opportunities are available, or risk "regrettable turnover" — losing the talent they most want to keep.

'Great scapegoat'

Thomas Roulet, professor of organisational sociology and leadership at the University of Cambridge, told BI that linking layoffs with AI was not new — even if Jassy's openness felt like a turning point.

"Firms do not hesitate to use AI as a reason to downsize, whether it is an excuse or an opportunity," he said. "Very often, they downsize before even thinking what they will replace with AI, due to market pressures."

"AI is a great scapegoat for a lot of unpopular strategic choices at the moment," Roulet added.

"There is enormous pressure on companies to show that they are able to replace employees with AI tools," Peter Cappelli, a professor of management at The Wharton School, told BI. "But the evidence indicates that it is very difficult to do so."

Klarna, for example, made headlines in 2022 when the company laid off 700 employees, mostly customer service agents, in favor of AI. In May, the financial services company had to hire some back to improve its services.

In Roulet's view, many companies that have already cut jobs in favor of AI were moving too fast.

"Unfortunately, many firms think of workforce reduction and engage with such reductions before they even think about AI replacement," said Roulet. "The reality is that bringing in AI into work takes a lot of learning cycles and trial and error — it does not appear clearly overnight."