Jamaica’s outlook revised to stable by Fitch after hurricane
If you are looking for evidence that AI is eliminating jobs, Amazon on Tuesday announced 14,000 job cuts because it says it needs to better prepare for the impact of AI. Specifically, Beth Galetti, a senior vice president of people experience and technology at Amazon, said in a blog post, “Some may ask why we’re reducing roles when the company is performing well,” and then elaborated, “What we need to remember is that the world is changing quickly. This generation of AI is the most transformative technology we’ve seen since the Internet, and it’s enabling companies to innovate much faster than ever before (in existing market segments and altogether new ones).” Amazon also warned of additional layoffs in the future. Ouch!
I should add that Amazon is also aggressively automating its warehouses with robots to reduce jobs. Amazon has 350,000 corporate jobs, plus 1.2 million warehouse workers, for a total of 1.55 million employees worldwide. Ironically, Amazon recently hired 250,000 seasonal workers, so the company’s workforce also has seasonal changes.
UPS has reduced its management workforce by about 14,000 positions so far this year and its operational workforce by another 34,000 positions. The company said it is well-positioned to navigate the upcoming holiday season and added that its restructuring efforts have resulted in cost savings of about $2.2 billion so far this year. Obviously, an AI-driven economy that promotes more online shopping has caused delivery companies to boost their efficiency, which may show up in U.S. productivity calculations.
Outplacement firm Challenger Gray announced 54,064 job cuts by companies nationwide in September. This is the fifth-highest monthly job cuts that Challenger Gray has monitored in the past 36 years. Obviously, the Fed has to continue to cut key interest rates to stimulate job growth in the upcoming months.
Interestingly, Fed Governor Christopher Waller referenced the ADP private payroll statistics in a speech and ADP has decided to stop providing the Fed with its data after doing so for several years. Governor Waller is one of five candidates that Treasury Secretary Scott Bessent said are being considered to be nominated to become the next Fed Chairman. Since Governor Waller foresaw the problems in the labor market well before the Labor Department’s big downward revisions, his credibility has soared since he is better at anticipating economic events rather than reacting to them too late. ADP also has downward revisions to its private payroll data and has reported negative job growth in three of the past four months.
Speaking of the Fed, the Federal Open Market Committee (FOMC) statement on Wednesday is expected to be dovish and signal another key interest rate cut at its December FOMC meeting.