David Smith Reveals the Real Forces Behind Layoffs Beyond AI Hype

As Amazon and Walmart adjust their workforces amid artificial intelligence advancements, Senior Associate Provost and faculty member at Pepperdine Graziadio, David Smith, tells The Washington Post that companies often cite AI as a reason for layoffs, while economic pressures remain the primary driver.

Amazon recently announced 14,000 corporate job cuts, while Walmart plans to maintain its 2.1 million-strong workforce and expects AI to reshape employee roles over the next three years. Both moves reflect a broader trend among U.S. corporations presenting workforce reductions or hiring freezes as signs of strategic efficiency rather than distress.

“Sometimes companies look for leaders, and when they see something happen with them, they use it as a cue,” Smith said, referring to how other firms follow Amazon and Walmart into AI adoption. He added, “I see it more as economic conditions creating pressures to cut costs, even as some firms may also be investing more in AI. It’s a blended narrative.”

Smith’s insights come as other major companies, including Google, JPMorgan, Goldman Sachs, and Nestlé, adjust hiring or cut jobs while integrating AI into operations. “Executives can highlight AI as a justification for workforce changes, but the real story is often a mix of efficiency, economic conditions, and competitive pressures,” he said. “AI is transformative, but companies are still in the early stages of realizing its full potential.”

Smith emphasizes that understanding the broader economic context is key to interpreting these workforce moves accurately.

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