the $125 Billion Secret: Amazon Told Wall Street One Thing and Employees Another. Here's the Truth.

Amazon's recent layoffs of 30,000 employees are primarily driven by the need to fund massive AI infrastructure investments, not by cultural or organizational issues as publicly stated. The company's free cash flow turned negative, while capital expenditure exploded to $125 billion, with 75% allocated to AI. This financial pressure necessitates cutting costs, with the $6 billion saved from layoffs being crucial for funding AI initiatives like Project Rainier and new data centers. While CEO Andy Jassy emphasizes cultural factors, the timing of the layoffs and the scale of AI investments suggest a strategic reallocation of resources from human capital to compute capital. This trend reflects a broader industry-wide shift where companies prioritize AI infrastructure, potentially leading to further workforce reductions across the tech sector.