Amazon layoffs hit amid an increase in robot automation: what to know

Automation has the potential to "eliminate 73 million" jobs in the U.S. by 2030, claims an online research group.
Baba Tamim
Amazon layoffs come as robot automation increases.
Amazon layoffs come as robot automation increases.

Interesting Engineering/iStock 

Tech titan Amazon recently announced the elimination of over 18,000 jobs, the biggest in the company's history. The news, which was disclosed in installments, will affect mostly administrative jobs, according to the firm. 

"Never wanted to start my 2023 on this. But as a part of Amazon layoffs, my job role got terminated recently," an Indian Amazon team member who was affected by the layoffs penned in a recent Linkedin post

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The company, which saw a massive expansion bubble during the covid epidemic, was quickly hit by the reality of thousands of layoffs in the following years.

"Today, I wanted to share the outcome of these further reviews, which is the difficult decision to eliminate additional roles," Amazon CEO, Andy Jassy said in a blog post earlier this month. 

"Between the reductions we made in November and the ones we're sharing today, we plan to eliminate just over 18,000 roles. Several teams are impacted; however, the majority of role eliminations are in our Amazon Stores and PXT organizations," stated Jassy. 

Amazon layoffs hit amid an increase in robot automation: what to know
Biggest tech layoffs until January 2023.

The job cuts represent around six percent of Amazon's 350,000 corporate employees. The retailer is facing slower online sales growth and is preparing for a potential recession that could harm its consumers' purchasing power. 

Interestingly, the company has also raised an army of warehouse robots - over 520,000 in the last decade - which many tech experts believe points to an apocalyptic imbalance for the future human workforce.

Amazon has regularly maintained that its robotics workers have no impact on the human workforce and claims to have increased both hourly pay and the number of people working for the retail giant in addition to the robots. 

An impartial view on the topic of whether robots are replacing human workers, which goes beyond Amazon, would likely be highly subjective, considering the closely monitored and divided information flow in the modern world. 

According to the layoff tracking website, layoffs.fyi, 1,021 tech companies laid off a total of 154,186 people in 2022. And in the first 19 days of 2023, more than 37,526 tech workers have been let go by about 122 organizations, averaging 1600 layoffs a day globally.

While recession fears are being blamed for job slaughter, some basic equations do point to companies using robotic machines to replace jobs done by humans, providing a glimpse of what the future may hold.

But before we try to understand the present situation, we must know the history of one of the largest online retailers in the world and its relationship with robots. 

A brief history of Amazon's relation with robots

Amazon layoffs hit amid an increase in robot automation: what to know
Sparrow - Amazon's recent robot arm that handles millions of diverse products.

On July 5, 1994, Jeff Bezos launched Amazon from his garage in Bellevue, Washington. What began as an online bookstore eventually expanded into the global retail power which we see today.

The company slowly pioneered automating warehouse processes. More than half-a-million robots have reportedly been installed by Amazon at its facilities across the world. 

This process was kick-started in 2012 when Amazon paid $775 million to acquire Kiva Systems and its automated guided vehicle (AGV) technology.

Proteus, Amazon's first autonomous mobile robot (AMR), was unveiled recently. While it performs similar activities to the Kiva robots, it is not caged and is able to work in close proximity to Amazon employees.

The company also revealed its plans to acquire mechatronics-focused Cloostermans, a business with headquarters in Belgium, in September 2022.

Amazon has amassed a sizable warehouse robot portfolio over the last decade. According to The Robot Report, an industrial robotics news website, the retail giant's robotics systems aren't limited to warehouses; the company has a $1.7 billion deal to acquire iRobot, which is subject to approval from the United States Federal Trade Commission.

It has already acquired Canvas Technology, Dispatch, and Zoox, as well as invested in firms like Agility Robotics, which demonstrated its bipedal robot, Digit, at RoboBusiness 2022.

In November 2022, Amazon announced Sparrow, the company's latest intelligent robotic system that handles "millions of diverse products," speeding the fulfillment process by relocating individual products before they are packaged.

Amazon layoffs hit amid an increase in robot automation: what to know
Amazon Scout.

All these new robots, business acquisitions, and deals hint more than ever that Amazon heavily relies on increasing robotic technology for the automation of work, which many would find scary. 

Amazon's increasing scale of robots 

Many people are employed at Amazon.com. However, the growth of its army of robots is slowly outpacing humans. 

It is one of the largest employers in the tech industry and the second-largest retailer in North America (after Walmart), and among the biggest retail leaders in the world.

At present, "the everything store" employs more than 1.5 million people globally. 

According to a 2016 article in The Seattle Times, the corporation claimed to have some 45,000 robots dispersed across 20 fulfillment locations. The "robot army" has increased by 50 percent since 2015, when the corporation employed 30,000 robots alongside about 230,000 human workers.

At a conference in April 2015, Amazon CFO Brian Olsavsky, while speaking about the robotic workforce, said, "We've changed, again, the automation, the size, the scale many times, and we continue to learn and grow there."

Olsavsky further added that he couldn't identify any "general trends" in the use of robotics since some fulfillment centers are "fully outfitted" in robots and "some don't for economic reasons — maybe the volume's not perfect for robot volume."

Fast-forward to 2023, company estimates suggest over 520,000 warehouse robots are now deployed across all sections of the company, showing a tremendous increase in the number of robotic machines at the company since 2012.  

Amazon layoffs hit amid an increase in robot automation: what to know
Amazon robots help sort packages.

"Speculation was rampant that Amazon was replacing people with robots. But ten years on, the facts tell a different story. We have more than 520,000 robotic drive units and have added over a million jobs worldwide," said an Amazon blog in June 2022, celebrating "10 years of Amazon robotics.  

"We have more than a dozen other types of robotic systems in our facilities around the world, including sort centers and air hubs. From the early days of the Kiva acquisition, our vision was never tied to a binary decision of people or technology. Instead, it was about people and technology working safely and harmoniously together to deliver for our customers. That vision remains today."

However, the blog could not deflect the fears of many that robots are taking over human work. 

Fears of robots taking over human work

"Amazon's robots are getting closer to replacing human hands," titled a report carried out by Vox news media outlet in September 2022. It was hinting at Amazon's warehouse robot, which can handle 1,000 items per hour.

The news didn't stop there; social media has been abuzz with the hotly debated topic since Amazon, and many tech companies declared job cuts. 

"Amazon can in-house manufacture 300,000+ robots per year," Brett Winton, Chief Futurist at ARK Venture Investment, Tweeted on January 12. 

"Expected in 2023: A new package-level pick and place system, first of its kind item-level pick and place upgraded stack moving robots that can operate alongside humans."

"The robotics inflection is quite evident reading through Amazon's robotics posts from just the past few months," he continued in the thread of Tweets that saw over 13.5 million views.

Winston was replying to a colleague's chart that showed the growth of the human and robot workforce at Amazon. 

Amazon layoffs hit amid an increase in robot automation: what to know
Amazon's robotic capability in the past seven years.

According to the tweet, Amazon's robotic capability has increased 33 times in the last seven years. The human winner of a recent Amazon selection challenge had to choose 30 products in an hour. Amazon now has a prototype robot that can pick 1,000 items per hour (2023).

Many users commented on the chart and Tweet shared by Winston.

"The human goes home after eight hours and packing 400 boxes. The robot keeps going for another two shifts and packs a total of 3000 boxes by the time the worker comes back in the next day," wrote a user. 

"The machine is 750 percent more productive, no toilet breaks, no injuries, no complaints - No jobs," he claimed. 

When Interesting Engineering questioned a tech industry worker about layoffs and the rise of robotic work power, he sighed and asked: "Are they going to steal our jobs?"

Delivery drone robots add to the fears of job cuts

A 2016 PricewaterhouseCoopers (PwC) report estimates that drones might replace $127 billion in services provided by human labor across various sectors.

The largest portions of the potential value—roughly $77.6 billion between them—come from infrastructure and agriculture, which include services like finishing the last mile of delivery routes and spraying crops with laser-like accuracy, according to the analysis by the PwC professional service network, that operates in 152 countries.  

Amazon layoffs hit amid an increase in robot automation: what to know
Amazon Prime Air delivery drone in the U.S.

In the coming decades, human labor will likely face serious risks from robot automation, and economists appear to agree. The strongest data points to a 50 percent job replacement rate of humans with autonomous robots by 2030. 

Amazon began using drones to deliver packages in late 2022. In the weeks leading up to Christmas, the retail behemoth airlifted parcels to clients in Northern California and a medium-sized Texas community.

"Our aim is to safely introduce our drones to the skies. We are starting in these communities and will gradually expand deliveries to more customers over time," Natalie Banke, Amazon Air spokesperson, told KTXL Fox 40.

"There are 1,199,750 people employed in the Couriers & Local Delivery Services industry in the U.S. as of 2023," according to the online statics by IBISWorld, an industrial research analytical group.  

The growth of industrial delivery drones could directly affect this sector, considering the aforementioned stats by PwC. 

Tech meltdown, automation, and Amazon

Amazon is not the only company cutting jobs as a result of the recession. In 2022, the entire tech industry experienced a massive meltdown, with the world's top tech billionaires losing approximately $575 billion of their personal fortune. Amazon's market value fell by one trillion dollars in a calendar year, the most ever.

Amazon layoffs hit amid an increase in robot automation: what to know
Tech layoffs in 2022-2023.

Nevertheless, according to online workforce statistics, Amazon still outnumbers Alphabet and Alibaba in terms of the number of employees among the top internet companies globally.

As per Zippa, a career research website, "automation has the potential to eliminate 73 million U.S. jobs by 2030, which would equate to a staggering 46 percent of the current jobs."

Not everything, though, is gloomy. The site concludes that "automation is also expected to create at least 58 million new jobs, as well as open the doors to 85 percent of the careers that haven't been invented yet."

Is this the age of extinction of the human workforce?

A global pandemic, a war in Europe, and inflation at a 40-year high have combined to cause a slowdown in sales last year, and Amazon was just the latest big tech company to face the repercussions.

However, it is still the second-largest private employer in the U.S., behind Walmart.

Amazon layoffs hit amid an increase in robot automation: what to know
Tech layoffs since COVID-19.

While Amazon insists that employees and robots will continue to collaborate within its warehouses, according to specialists in robotics, the business may eventually be able to rely on robots to carry out much of the jobs that it currently delegates to human workers.

This brings us to the conclusive question, is the age of extension for the human workforce?

We may not have a clear answer yet, but the above data shows a bleak picture. However, it also gives hope for new sectors opening up due to automation. And again, the balance hangs in the hands of humanity.