Chamath Palihapitiya Says Amazon Was Left 'Bloated And Inefficient' Due To DEI Hiring, AI Is Just The Scapegoat: 'Chickens Come Home To Roost'

Billionaire investor Chamath Palihapitiya pushed back against the narrative that AI is to blame for the latest wave of layoffs at Amazon.com Inc. (NASDAQ:AMZN), arguing that the real cause is rooted in flawed recruitment practices from the past decade.This Is ‘Not AI Job Loss’On Tuesday, in a post on X, Palihapitiya said that Amazon’s decision to cut 30,000 corporate jobs was “not AI job loss,” but was instead “the unwinding of the DEI-fueled Hiring Bonanza of the past decade.”Referring to the Diversity, Equality and Inclusivity frameworks that drove hiring decisions in the past, Palihapitiya said many of the roles created during that time “were created under fragile pretenses / immutable traits,” which he said included traits “other than talent.”“But eventually the chickens come home to roost,” he said, noting that this kind of hiring may have led the company to become “bloated and inefficient,” prompting such decisions. According to Palihapitiya, AI is just being used as a cover “for articles and pundits trying to find a scapegoat,” while adding that it is not the root cause behind the layoffs. Amazon Plans To Eliminate Half A Million JobsHowever, recent statements by Amazon’s top leadership on its AI and workforce strategies appear to contradict Palihapitiya’s assertions.In July, the company let go of several hundred employees at its AWS cloud computing unit, with CEO Andy Jassy crediting this to the advances in AI, saying that its increasing use would reduce the need for certain roles.Last week, Amazon announced that it plans to reduce its workforce by half a million jobs, replacing them with AI, automation, robots, and other technologies. This marks a significant reduction from the company’s current 1.56 million employee base. Growing AI Job Loss ConcernsRecently, several experts, investors and analysts have expressed concerns regarding the growing instances of AI-driven job losses across sectors. Ark Invest’s Cathie Wood warned about AI disrupting entry-level roles for recent college graduates, while highlighting that the unemployment rate among graduates has climbed from 4% to 6.3%. Analysts at Goldman Sachs Group Inc. echoed Wood’s concerns, noting the falling rate of U.S. employment among young tech workers, starting in 2022, which was around the time that ChatGPT started becoming more prominent. It highlights that unemployment among 20 to 30-year-olds rose 3 percentage points since 2024, which is four times the increase in the overall jobless rate. All of these correspond to the rising use of AI in tech, which is eliminating or reducing the demand for certain roles. Amazon shares were up 1% on Tuesday, closing at $229.25, and are up 0.31% overnight. The stock scores high on Momentum and Growth in Benzinga’s Edge Stock Rankings, with a favorable price trend in the short, medium and long terms. Click here for deeper insights on the stock, its peers and competitors.Photo Courtesy: Kathy Hutchins On Shutterstock.com Amazon, UPS Slash Desk Jobs: AI Is Coming For Your Manager