What are Amazon’s layoffs really about?

Amazon has announced layoffs affecting approximately 14,000 employees, citing rapid technological advancements like AI and the need for a leaner corporate structure. Senior vice president Beth Galetti highlighted AI's transformative power and the necessity of quicker innovation for customers and business. However, Amazon CEO Andy Jassy offered a different perspective, suggesting the layoffs were more about company culture and speed than immediate financial or AI drivers. He emphasized the importance of being lean, flat, and fast during periods of transformation. Despite these statements, Amazon's financial reports indicate a significant increase in capital expenditures, particularly for property, equipment, and data center expansion. This suggests a potential preemptive cost-cutting measure to fund future technological investments. Other companies like UPS and Target have also undergone significant workforce reductions, indicating a broader trend in the corporate world. Experts like Drew Harry advise skepticism regarding stated layoff reasons, pointing out that companies may simply be looking to reduce costs and reallocate funds. The primary driver, according to some, is often a desire to cut expenses and reinvest capital elsewhere. Amazon is significantly increasing its spending on AI chips and data centers, forecasting substantial investments in these areas.