Amazon’s Latest Layoffs Add Fuel to White-Collar Recession

Biggie Smalls, the rapper also known as the Notorious B.I.G., wasn’t lying when he said more money means more problems. While blue-collar industries in the US grapple with a labor shortage, typically higher-paying white-collar jobs are disappearing by the thousands.

The latest example comes from Amazon, one of the world’s largest and wealthiest companies, which said this week it’s axing 16,000 corporate jobs, following the elimination of another 14,000 in October.

“We’ve been working to strengthen our organization by reducing layers, increasing ownership, and removing bureaucracy,” Beth Galetti, senior vice president of people experience and technology at Amazon, said in a blog post Wednesday. 

Blame the Bots 

Jeff Bezos’ company isn’t the only one accelerating a so-called white-collar recession. Pinterest announced via a recent filing with the Securities and Exchange Commission that it plans to trim its 5,200-person workforce, by less than 15%. Chemicals company Dow is cutting 4,500 jobs as part of a new initiative to simplify operations and streamline processes, and The New York Times reported earlier this month that Meta plans to trim 10% of staff in its Reality Labs division, which employs about 15,000. 

What do all these layoffs have in common? 

They’re bringing fears of robots taking human jobs to a boiling point. Amazon and Meta have been heavily investing in AI, while Pinterest said its layoffs were partly due to its prioritization of AI-focused roles and products. Dow also pointed out that its “Transform to Outperform” plan would use AI to boost productivity and shareholder returns by streamlining operations.

As AI-related layoffs accelerated late last year, experts told CNBC that some companies may be AI-washing their job cuts. “We spend a lot of time looking carefully at companies that are actually trying to implement AI, and there’s very little evidence that it cuts jobs anywhere near like the level that we’re talking about,” said Peter Cappelli, a professor of management at the Wharton School. 

But with jobs still going by the wayside, that probably won’t make Americans feel much better: 

• Consumer confidence fell to its lowest level since 2014 in January, surpassing a previous trough driven by job-related worries during the height of the COVID-19 pandemic, according to data released by the Conference Board this week. Perceptions of employment conditions specifically also edged lower. 
• Write-in responses from consumers about what’s affecting the economy included an increase in mentions of the labor market in January (alongside factors like prices and inflation, tariffs and politics), Dana Peterson, chief economist at the Conference Board, said in a statement. 

Jobs Day: Consumers’ souring mood is likely to play heavily into scrutiny of the Bureau of Labor Statistics’ next report on the US job market, by economists and Wall Street analysts alike. The numbers are scheduled to come out next Friday.