Canadian-American venture capitalist Chamath Palihapitiya is not a fan of Amazon’s explanation for its layoffs. He doesn’t believe the massive job cuts are caused by artificial intelligence, suggesting that Amazon’s hiring mistakes over the years are finally catching up with it.
On Tuesday, Amazon began its first round of layoffs, firing around 14,000 employees, just a day after Reuters reported that a total of 30,000 layoffs were planned. CEO Andy Jassy has said that the company’s increasing reliance on artificial intelligence would likely lead to more job cuts in the coming months.
Billionaire investor pushes back on AI blame narrative
In a post on X (formerly Twitter) on Tuesday, Palihapitiya said Amazon’s decision to lay off 30,000 corporate employees was “not AI job loss” but rather the result of “the unwinding of the DEI-fueled hiring bonanza of the past decade.”
The Asian-origin billionaire investor was referring to the company’s Diversity, Equity and Inclusion (DEI) initiatives, claiming that many roles created under those umbrella were based on “fragile pretences” and “immutable traits”, traits other than raw talent. “Non-obvious take: this is not an AI job loss. This is the unwinding of the DEI-fueled Hiring Bonanza of the past decade. Many jobs in that period were created undefr fragile pretences / immutable traits. Ie, things other than talent,” Palihapitiya wrote on X.
Non obvious take: this is not AI job loss. This is the unwinding of the DEI-fueled Hiring Bonanza of the past decade.
— Chamath Palihapitiya (@chamath) October 28, 2025
Many jobs in that period were created under fragile pretenses / immutable traits. Ie, things other than talent.
But eventually the chickens come home to roost.… https://t.co/ByMJClU9B6
“But eventually the chickens come home to roost,” he continued, suggesting Amazon’s workforce had become “bloated and inefficient.” According to him, the term AI is being misused as a convenient explanation for job cuts, calling it a “scapegoat” for media narratives and pundits who are missing the bigger picture. “AI” is the convenient air cover for articles and pundits trying to find a scapegoat, but it’s not the root cause if I had to guess,” he added.
Amazon’s massive cuts go beyond corporate layoffs
Last week, Amazon confirmed plans to reduce its global headcount by nearly half a million jobs. The company, under the new leadership of CEO Andy Jassy, said they are relying more on automation, AI systems, and robotics to streamline operations. The company currently employs around 1.56 million people globally.
Earlier in July, Amazon had already eliminated several hundred positions in its AWS cloud department. At that time, CEO Andy Jassy directly mentioned AI advancements, saying the company’s increased use of automation was reshaping the way certain teams operate.
According to Layoffs.fyi, the website tracking major layoffs, around 218 tech companies reduced their headcounts in 2025, among which 112,732 tech employees lost their jobs. Most of these companies have cited AI and cost-cutting as a driving force behind these cuts.
Many industry leaders have been warning about AI replacing human jobs, but very less predicted that it would happen at such a great pace. Ark Invest CEO Cathie Wood warned that AI could severely impact entry-level opportunities, adding that the unemployment rate among recent college graduates has risen from 4% to 6.3%.
Economists at Goldman Sachs also flagged a big drop in employment rates among young tech workers since 2022, given the rise of generative AI tools like ChatGPT. According to their analysis, joblessness among Americans aged 20–30 has risen by 3 percentage points since 2024, about four times the overall increase in the US jobless rate.
