Billionaire investor Chamath Palihapitiya has blamed Amazon's recent round of job cuts on bad hiring habits linked to its diversity and inclusion initiatives, defying accusations that artificial intelligence is the primary cause of the layoffs.
Amazon started its initial round of layoffs on Tuesday, dismissing about 14,000 employees, a day after reports indicated the company intends to lay off up to 30,000 employees in total.
CEO Andy Jassy previously said the firm's growing use of AI and automation would result in more restructuring, but Palihapitiya thinks the explanation is misleading.
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'This is not an AI job loss'
In a post on X, the Canadian American venture capitalist wrote that the layoffs were "not AI job loss" but the consequence of "the unwinding of the DEI-fueled hiring bonanza of the past decade."
He asserted that a lot of the jobs created under Amazon's Diversity, Equity, and Inclusion (DEI) initiative were founded on "fragile pretences" instead of talent or performance.
"Non-obvious take: this is not an AI job loss. This is the unwinding of the DEI-fueled hiring bonanza of the past decade,” Palihapitiya said, adding that “many jobs in that period were created under fragile pretences or immutable traits, i.e., things other than talent."
He went on to state that Amazon was "bloated and inefficient" and criticised the firm for scapegoating AI as an excuse for its job cutbacks. "AI is the convenient air cover for articles and pundits trying to find a scapegoat," he stated.
Amazon's cuts expand to divisions
Amazon last week confirmed it would cut its worldwide workforce by almost 500,000 jobs, moving beyond corporate departments into logistics and operations. The company, which has some 1.56 million employees worldwide today, said the restructuring would make it more lean as automation grows.
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Amazon reduced dozens of positions in its AWS cloud division earlier this year. Jassy at the time referenced AI and robotics advancements as part of a multi-year effort to streamline teams and improve productivity.
At least 218 tech companies have made layoffs so far in 2025, with over 112,000 tech employees being laid off this year alone, according to Layoffs.fyi. Most companies have cited AI-driven cost reductions as the reason for cutting staff.
Wider impact of automation
Goldman Sachs economists have disclosed a 3% increase in unemployment among U.S. tech professionals between the ages of 20–30 since 2024 that they attribute to increased usage of generative AI tools. Cathie Wood, Ark Invest CEO, also cautioned early this year that automation would most adversely affect entry-level jobs, citing an increase in unemployment rates for new graduates from 4% to 6.3%.
As Amazon continues to present its layoffs as part of a shift fueled by AI, Palihapitiya's words are part of a widening debate about whether the problem is technology or decades of unchecked corporate expansion.
