Amazon Layoffs 2025: Firm 'Trading Talent for GPUs' to Protect AWS Margins, AI Analyst Says

When Amazon announced it was planning to cut as many as 30,000 corporate jobs this week, the narrative seemed simple: AI is finally automating white-collar work. CEO Andy Jassy himself has said AI tools would likely lead to further job cuts , and analysts suggested the company was seeing AI-driven productivity gains.

But in a viral TikTok video, AI Analyst and Product Leader Nate B. Jones claims this 'lazy narrative' is fundamentally wrong.

'The reality is very different,' Jones stated in the video. He argues that the layoffs are not happening because 'the robots are doing the jobs now.' Instead, he claims the cuts are a direct result of a corporate finance crisis driven by the staggering cost of the AI revolution.

Amazon's 'Lazy Narrative' on AI vs. the 'Cost of Chips'

Jones, who found 'life after Amazon,' aimed to be 'really precise' about the distinction. He agrees the layoffs are related to AI, but clarifies it is about the 'cost of chips.'

'Nvidia sells chips to everyone, GPUs, those chips are how we power AI, and none of the major cloud providers can get enough chips right now,' he explained. 'Microsoft can't, Google can't... and Amazon definitely can't.'

According to Jones, Amazon Web Services (AWS), the company's main profit centre, has a 'roughly 25% burning backlog on GPUs.'

In simple terms, Amazon is 'missing out on revenue' because 'companies are begging for more compute from AWS that they can't fulfill'. The company simply cannot buy the essential Nvidia GPUs fast enough to meet demand.

This creates a massive squeeze. The 30,000 job cuts, which represent nearly 10% of Amazon's corporate employees, are not about replacing workers with robots. According to Jones, the cuts are about freeing up capital to buy the expensive hardware needed to run the AI services of the future.

How Wall Street Pressure Is Forcing Amazon to 'Trade Talent for GPUs'

Jones's analysis connects the layoffs directly to market expectations. Amazon's cloud unit, AWS, reported a 17.5% sales increase, lagging far behind Microsoft's 39% and Google's 32% gains.

Jones notes, 'The street was not happy with their 18% year over year growth rate this quarter.'

Wall Street wants that growth rate to 'pick that growth rate back up', which Amazon 'cannot do if they cannot buy more chips.'

This leaves the company in a difficult position. It cannot buy the billions in GPUs needed to grow AWS 'without destroying their margin unless they can cut costs other places.'

'And chips are so expensive,' Jones added, 'that the only way they can cut costs is by going after jobs, or fixed costs or salaries.'

He frames the layoff announcement as a 'guidebook to the things that Amazon finds least painful to cut when they have to trade talent for GPUs in order to maintain their margins.'

The cuts, which may affect human resources, operations, and even AWS itself, show which divisions Amazon is 'strategically not as invested in.'

While his analysis clarifies the complex financial pressures, Jones was empathetic to those affected. 'None of this does anything to make people who got fired today feel better', he said. 'If you got let go from Amazon, that really sucks. And this doesn't fix it.'

IBTimes UK has reached out to Amazon reps for comments.