Amazon VP Told Me The REAL Reason for Layoffs

Everyone thinks that AI is causing tech layoffs. It's not. Capital got expensive. And once capital got expensive, companies had to ask a question that they haven't had to ask in years, which is, who actually produces value here. So, a few weeks ago, I was on a ski lift here at Bachelor with a former Amazon guy who was laid off a little while ago. He'd spent years building business cases to get major projects green lit. Right? This was not an entry-level person who had gotten swept up in a reduction. He was a very senior guy. And so I asked him the obvious question. Do you think that AI is really taking people's jobs? And he said yes without hesitation. Then he told me about this program he built using AI, which was this smart email sequence that can re-engage tens of thousands of small business accounts that previously weren't worth assigning to a human rep. And it was a genuinely clever project, right? And it had very real revenue impact. And that sounds sort of exactly like the story that everyone's telling right now, right? AI replaces humans. Case closed. Except we were building automations like this 10 years ago using Eloqua and Marquetto. And what he built was very smart, but the underlying capability is not new. AI might make it 15% more efficient, but this is workflow automation with a better label on it. And that distinction matters because when we call everything AI, we misdiagnose the actual threat. So I asked him, why do you really think you were let go? And he kind of looked around a little bit and looked off the lift and it's like it wasn't the automation, it wasn't AI, it was relocation policy. The company had wanted him back in office full-time. He didn't want to move back to Seattle. He pushed back and that was that. So here's what actually happened. a senior leader at one of the biggest companies on earth lost his position not because AI replaced him but because of a return to office mandate and then the project that he built the one that everyone would point to as proof right that AI is taking jobs is automation that's existed for a decade and this isn't just one guy on a ski lift when you look at what's actually happening inside these companies the pattern becomes obvious so for almost a decade interest rates were near zero bonds were basically paying you nothing. So capital then moved up the risk curve, right? Stocks became the new bonds, venture capital became the new stocks, and suddenly anyone with a pitch deck in an exfang title could raise millions of dollars. So I remember I advised a fintech startup where the founder had raised a $4 million seed on a $15 million valuation with nothing, no software, no customers, just a vague idea for a platform that she would have liked to had at her last job. and no one blinked. It was totally normal. So, what do companies do then when capital is essentially free? They hire. Amazon went from 800,000 employees in 2019 to 1.6 million by 2021. They doubled their headcount in like 2 years. And along the way, revenue per employee dropped from 484K to 320,000. They were hiring faster than the new hireers were creating value. And I've seen this happen in places far smaller than Amazon. So during the cheap money era, okay, one story, I was brought in to advise a company that was burning $2 million a month on Google ads. 2 million. They didn't even have basic analytics hooked up to the back of this. They literally had no idea if a single lead ever had come from Google. Not one. And they did not care because their fund had told them, you have to spend to grow and we can't raise new money if we don't spend what we have. And this is exactly what my friend described from the inside. He was telling me about Amazon and in the early days that they were, you know, obsessed with speed and ship it and test and innovation and move. But the headcount started to explode and then the culture basically inverted. Everyone became political and riskaverse and he said they'd spend weeks going in circles and decisions that used to take a day because there were just too many people in the room that needed to justify being there. So when capital got expensive again and these companies had to cut, who do you think that they cut? They didn't fire the people who built the systems. They fired the people the systems had made redundant three years ago and they called it AI transformation because that's a better press release than we overhired during a bubble. So AI is a real accelerant. But if you think that AI is the story behind what's happening right now in the job market, you're looking at the symptoms and calling it the disease. So what this Amazon director described, economists have a name for it and it's called the K-shaped economy. So after a disruption everyone falls together but then the recovery splits right one arm goes up and one arm goes down and then they never recon converge. So the upper arm in a modern economy is people who own process, own distribution, who understand leverage in systems. And the lower arm it's people whose value was their presence, right? Their title or their seat in the building, their subject matter knowledge that can now be googled or prompted. And the test is very simple, right? There's four questions. Who produces revenue? Who protects margin? Who owns a process? Who owns distribution? And if your answer to all four of those is not me, you're on the lower arm. But AI isn't what's actually compressing these jobs. What's actually happening here is the end of abstraction. For 20 years, companies have been adding layers. Layers between the customer and the product. Layers between the decision, the execution, strategy teams, alignment meetings, crossunctional liaison. They were entire roles that existed to translate between other roles. And when that capital was free, abstraction was a luxury that the companies could afford. You could hire someone whose entire job was to sit between two people and align priorities. Nobody asked what they produced, right? Because nobody had to. during that environment. But now they have to. And it turns out that most of that middle layer was not coordinating value. It was diffusing it. It was making everything slower and more political and harder to measure. Which is exactly what my friend at Amazon described. So the compression is not AI deleting jobs from the top down. It's the economy collapsing the distance between the person who does the work and the person who pays for it. every layer in between is getting squeezed out. And that's the real test. Not can AI do your job, but how many layers sit between you and the value you create. Because the fewer layers between you and revenue or margin protection, the safer you are and beyond safe, the more valuable you are. And the more layers, the more you look like overhead. And the more that you will go down the wrong side of the K-shaped economy instead of up the right side. So the question isn't whether AI is coming for your job. That was never the right question. The question is when you look at what you actually do every day, which arm of the K are you on? And here's the thing. Most people watching this think that they're on the upper arm. Most people think they're the exception. So here's a test. Can you finish this sentence? I own a process that either produces revenue or protects margin. And that process is what? So if you can fill in that blank clearly in one sentence, you're not only fine, you are more than fine. You are going to become disproportionately valuable in a modern economy. But if you were sitting there trying to figure out how to word it, okay, that's not a language problem. What you have is a positioning problem. And that distinction is the entire game right now. The threat was never AI. AI is the cover story. The threat was sitting in a system that was only ever sustainable when money was free and never realizing that you needed to move before the music stopped and it stopped. But the people on the upper arm of that K, they are not smarter than you. They are not more talented. They just stopped selling their time and they started owning a process. And that is the shift. And it's a shift that you can make if you know what to build.

Everyone thinks AI is responsible for the wave of tech layoffs. The reality is more structural: the era of cheap capital ended. _____________ The System (Scale to $500K+) https://www.brendandell.com/freelance-formula-299 *Currently only $99 for next 50 students with code Transform Work with Brendan (Positioning Sprint – application only): https://www.brendandell.com/positioning-sprint Get advice on your career, messaging, or positioning: https://www.brendandell.com/offers/wH7YY4FP/checkout ______________ For almost a decade, near-zero interest rates pushed investors up the risk curve. Venture capital flooded the tech ecosystem, companies hired aggressively, and organizations added layer upon layer of management, coordination roles, and internal complexity. When money was essentially free, few companies had to ask the hardest question in business: who actually creates value here? Now that capital is expensive again, that question has returned. In this video, I tell the story of a former Amazon director I met on a ski lift at Mt. Bachelor who was recently laid off. At first glance, his story sounds like the narrative everyone is hearing right now: AI replacing workers. He had built an automation system using AI that could re-engage tens of thousands of small business accounts. But when you look closer, the automation itself wasn’t new. Systems like this have existed for more than a decade in tools like Eloqua and Marketo. The real reason he lost his job wasn’t AI—it was a return-to-office policy. His story reveals a deeper pattern inside large tech companies. During the cheap money era, companies massively expanded headcount. Amazon doubled its workforce between 2019 and 2021, while revenue per employee dropped significantly. Organizations grew more political, more risk-averse, and slower as layers of internal coordination multiplied. Now that capital is expensive again, those layers are being cut. Economists call the outcome a K-shaped economy: after disruption, some people move upward while others fall behind. The dividing line is not intelligence or talent—it’s proximity to value creation. People who own processes that generate revenue, protect margins, control distribution, or build systems move upward. People whose roles depend on organizational layers, titles, or presence inside a company become vulnerable. The real shift happening in the economy is the collapse of abstraction—the distance between the person doing the work and the person paying for the value is shrinking. AI is accelerating this trend, but it isn’t the root cause. The real question every professional should ask is simple: Do you own a process that directly produces revenue or protects margin? Because the future belongs to the people who do.