Efficiency first and foremost! A new wave of mass layoffs is sweeping across the United States, but it is not all due to AI.

Even tech companies, such as Meta, the parent company of Facebook and Instagram, and the long-established tech giant Microsoft Corporation, which are considered the biggest winners in the global economic expansion driven by the AI super wave, have recently announced staff reduction plans. Even the AI biggest winner like Meta announcing layoffs is enough to show that the wave of layoffs is not solely due to AI, but the underlying core logic still lies in efficiency improvements under the slow-down of economic momentum. In an economy defined by uncertainty, AI frenzy, and global political tensions, tens of thousands of American workers are becoming victims of mass layoffs by large companies like Amazon.com, Inc., UPS, Nestle, and others. Last Tuesday, Amazon.com, Inc. announced in an internal memo to employees that it will reduce its "corporate workforce" by approximately 14,000 positions. This announcement raised a question: does this mean that workers are being replaced by emerging technologies, with the possibility that they may be left behind by the times? Amazon.com, Inc. CEO Andy Jassy stated, "The reduction of the workforce is not really driven by financial reasons, and certainly not driven by AI at the moment." "It's a cultural issue," Jassy said. "If you grow as fast as we have over the last few years - in terms of business scale, number of employees, number of physical locations, types of businesses involved - you end up with a lot more people than you had before and a lot more layers than you had before." However, Amazon.com, Inc.'s ambitious investment in AI is yielding strong revenue data, as reflected in the 20% growth in revenue from AWS cloud services, setting a record increase in three years. Many Wall Street analysts have indicated that Amazon.com, Inc.'s management sees strong revenue prospects from AI and significantly increased operational efficiency, thus making the decision to massively lay off employees. According to Amazon.com, Inc.'s management, in the past 12 months, the added data center capacity has exceeded 3.8 gigawatts, with an additional 1 gigawatt planned for Q4, doubling the current capacity for 2022, with plans to double it again by 2027. The company emphasized that the newly added data center AI computing capacity is being built and used simultaneously, at a synchronized monetization rate. Morgan Stanley predicts that under the surge in cloud AI computing power, AWS's revenue growth rate in the next two years will reach 23% and 25%, respectively. The company also announced a series of positive developments in its AI business, including strong demand for self-developed AI chips and related software, directly addressing investors' concerns about its potential lag in the AI race. While massive layoffs have occurred at companies like Amazon.com, Inc. and UPS, does this have little to do with artificial intelligence? It is understandable if American workers feel a "neck injury" given the recent layoffs. Just a few years ago, the U.S. labor market was strong, with job vacancies reaching a record high in 2022, along with a surge in resignations and wage expansion. According to Indeed, job postings in technology and math-related positions reached more than double the level in February 2020 at the beginning of the year, but by July of this year, it had dropped by about 36% below pre-pandemic levels. Indeed pointed out that the collapse in demand for technology industry workers this year may be explained by the unprecedented recruitment boom and broader economic conditions driven by the post-pandemic global economic recovery, as well as strong interest in AI investments. "If we look at Amazon.com, Inc., we know that they were very aggressive in hiring between 2017 and 2022, especially during the pandemic, adding a large number of employees, so I am not surprised by the layoffs," said Timothy DeStefano, an economics professor at Georgetown University, in a media interview. "I personally do not think these layoffs have anything to do with AI," DeStefano added. Indeed, these tech companies are investing heavily in artificial intelligence, but there is little evidence to suggest that they are deploying this revolutionary AI technology in a way that would replace thousands of workers, DeStefano said, and he also emphasized that recent layoff announcements are not particularly unique. Goldman Sachs Group, Inc. released a report last Thursday on how its more than 100 senior bankers' clients are using or planning to use AI, finding that "only 11% of U.S. companies are actively reducing staff due to AI," although larger cuts could occur later. "These results support our long-standing view that AI is primarily a breakthrough technology that enhances enterprise productivity and revenue, while also confirming our recent findings that the impact of AI on the labor market is still limited to a few specific industries such as technology," the economists at Goldman Sachs Group, Inc. said. However, Amazon.com, Inc. is not the only large American company to announce major layoffs. United Parcel Service (UPS) stated in its third-quarter earnings report that it had reduced its "operational workforce by about 34,000 positions" in the first nine months of the year to seek higher and more robust operational efficiency, while also cutting about 14,000 positions, mainly in management. American retail giant Target Corporation also plans to cut 1,800 corporate positions, while Paramount-Skydance (PSKY) will cut about 1,000 positions and is expected to cut another 1,000 positions among its Paramount employees. Even tech giants like Meta, the parent company of Facebook, which is considered a big winner in the economy driven by the AI wave, has recently announced layoff plans, and the layoffs are happening in its AI-related business division. Media reports suggest that the American electric vehicle newcomer Rivian is also implementing staff reductions. The beginning of AI's impact? Despite the relative stability of the scale of layoffs and some signs of mild recovery in the U.S. labor market in October amidst the government shutdown preventing the disclosure of non-farm employment data, the U.S. employment environment this year, with "neither hiring nor major layoffs," continues to leave young workers at a loss and the share of long-term unemployed at the highest level in over three years. The pool of unemployed Americans is expected to expand significantly, which is undoubtedly unwelcome news. "I think layoffs are a very negative phenomenon, especially for the individuals involved," said Matthew Bidwell, a management professor at the Wharton School of the University of Pennsylvania, in a media interview. "But they are also part of the 'creative destruction' process of capitalism - companies invest in establishing businesses in certain key areas, and over time, these businesses are proven to be unworkable or outdated." However, some tech companies are candid about certain realities that concern workers: American education technology company Chegg stated last week that it will drastically cut about 45% of its employees as profit margins erode due to continuous encroachment by AI tools like ChatGPT; and the CEO of the American CRM cloud software leader Salesforce said that efficiency gains from AI mean the software tech company now needs fewer technical hands. But from a broader perspective, "I think there are enough early signs to suggest that AI may begin to impact the labor market to some extent - but so far, it is not clear to me whether we have seen this in these layoffs with sufficient evidence," said Bidwell.