Earlier this year, Garman said replacing junior software developers with AI was “one of the dumbest things I’ve ever heard,” and it’s a point he stands by. In an interview with WIRED published on Tuesday, Garman said displacing junior engineers and employees with new tech is a bad business move. 

Entry-level workers are usually paid the least, meaning getting rid of their positions first in favor of higher-paid senior talent is not a cost-effective strategy, he noted. Moreso, these fresh-faced young workers are likely recent college graduates with energy, excitement, and deep familiarity with AI tools. Eliminating them, in Garman’s eyes, would be myopic.

“At some point that whole thing explodes on itself,” Garman said. “If you have no talent pipeline that you’re building and no junior people that you’re mentoring and bringing up through the company, we often find that that’s where we get some of the best ideas.”

“You’ve gotta think longer term about the health of a company,” he added. “And just saying ‘OK great, we’re never going to hire junior people anymore,’ that’s just a nonstarter for anyone who’s trying to build a long-term company.”

A Stanford University study published in August suggested AI is already starting to have its way with entry-level workers. The research revealed that “the AI revolution” is having a “significant and disproportionate impact on entry-level workers in the U.S. labor market,” particularly 22- to 25-year-old software engineers and customer service agents.

AI’s workforce shakeups 

Despite Garman’s adamance on AI not replacing young workers, Amazon’s own automation advancements have coincided with the company laying off thousands of employees this fall. The tech giant announced in October it would slash 14,000 jobs, mostly middle management positions. Earlier this year, Amazon laid off a smaller portion of workers from divisions including AWS, its Wondery podcast division, and the consumer devices unit. 

Rather than attribute the axings to AI, Amazon instead said the layoffs were part of an effort to make the business more efficient after a period of growth, as well as resolve cultural mismatches that emerged in the workforce.

“The announcement that we made a few days ago was not really financially driven, and it’s not even really AI-driven, not right now at least,” CEO Andy Jassy said at the time. “It’s culture.”

Still, AI advancements are poised to impact Amazon’s workforce. The memo outlining the fall layoffs cites the transforming technology of AI as the impetus for improving workflows with leaner teams. A June memo from the company said AI efficiency gains will “reduce our total corporate workforce,” and a New York Times investigation published in October reported Amazon had a lofty goal to automate 75% of its work, translating to about 600,000 jobs the tech giant would not ultimately need to hire for.

AWS did not immediately respond to Fortune’s request for comment.

Garman isn’t naive to the workplace upheaval AI could bring. He predicted the technology will initially create a burst of new jobs, as well as reduce several roles, but he was certain that AI would ultimately transform the nature of work.

“One of the things that I tell our own employees is ‘Your job is going to change.’ There’s no two ways about it,” he told WIRED.

The 49-year-old AWS CEO said employees have the potential to have more impact and responsibilities as a result of AI, but it will require learning news skills, as well as organizing teams differently. While entry-level workers should not be the primary victims of AI’s workplace shake-ups, other jobs and industries will be impacted, Garman noticed.

“If they don’t, they’ll most likely get left behind by people who move faster and do change,” he said. “There is going to be some disruption in there for sure. Like there is no question in my mind.”

The unemployment rate rose to 4.6%, highest since 2021.

Both the October and November job creation numbers, released Tuesday by the Labor Department, came in late because of the 43-day federal government shutdown.

The November job gains came in higher than the 40,000 economists had forecast. The October job losses were caused by a 162,000 drop in federal workers, many of whom resigned at the end of fiscal year 2025 on Sept. 30 under pressure from billionaire Elon Musk’s purge of U.S. government payrolls.

Labor Department revisions also knocked 33,000 jobs off August and September payrolls.

Workers’ average hourly earnings rose just 0.1% from October, the smallest gain since August 2023. Compared to a year earlier, pay was up 3.5%, the lowest since May 2021.

Healthcare employers added more than 46,000 jobs in November, accounting for more than two-thirds of the 69,000 private sector jobs created last month. Construction companies added 28,000 jobs. Manufacturing shed jobs for the seventh straight month, losing 5,000 jobs in November.

Hiring has clearly lost momentum, hobbled by uncertainty over President Donald Trump’s tariffs and the lingering effects of the high interest rates the Federal Reserve engineered in 2022 and 2023 to rein in an outburst of inflation.

American companies are mostly holding onto the employees they have. But they’re reluctant to hire new ones as they struggle to assess how to use artificial intelligence and how to adjust to Trump’s unpredictable policies, especially his double-digit taxes on imports from around the world.

The uncertainty leaves jobseekers struggling to find work or even land interviews. Federal Reserve policymakers are divided over whether the labor market needs more help from lower interest rates. Their deliberations are rendered more difficult because official reports on the economy’s health are coming in late and incomplete after a 43-day government shutdown.

Labor Department revisions in September showed that the economy created 911,000 fewer jobs than originally reported in the year that ended in March. That meant that employers added an average of just 71,000 new jobs a month over that period, not the 147,000 first reported. Since March, job creation has fallen farther — to an average 35,000 a month.

The unemployment rate, though still modest by historical standards, has risen since bottoming out at a 54-year low of 3.4% in April 2023.

“The takeaway is that the labor market remains on a relatively soft footing, with employers showing little appetite to hire, but are also reluctant to fire,” Thomas Feltmate, senior economist at TD Economics, wrote in a commentary. “That said, labor demand has cooled more than supply in recent months, which is what’s behind the steady upward drift in the unemployment rate.’’

Adding to the uncertainty is the growing use of artificial intelligence and other technologies that can reduce demand for workers.

“We’ve seen a lot of the businesses that we support are stuck in that stagnant mode: ‘Are we going to hire or are we not? What can we automate? What do we need the human touch with?’’’ said Matt Hobbie, vice president of the staffing firm HealthSkil in Allentown, Pennsylvania.

“We’re in Lehigh Valley, which is a big transportation hub in eastern Pennsylvania. We’ve seen some cooling in the logistics and transportation markets, specifically because we’ve seen automation in those sectors, robotics.’’

Worries about the job market were enough to nudge the Fed into cutting its benchmark interest rate by a quarter of a percentage point last week for the third time this year.

But three Fed officials refused to go along with the move, the most dissents in six years. Some Fed officials are balking at further cuts while inflation remains above the central bank’s 2% target. Two voted to keep the rate unchanged. Stephen Miran, appointed by Trump to the Fed’s governing board in September, voted for a bigger cut – in line with what the president demands.

Tuesday’s report shows that “the labor market remains weak, but the pace of deterioration probably is too slow to spur the (Fed) to ease again in January,” Samuel Tombs, chief U.S. economist at Pantheon Macroeconimics, wrote in a commentary. The Fed holds its next policy meeting Jan. 27-28.

Because of the government shutdown, the Labor Department did not release its jobs reports for September, October and November on time.

It finally put out the September jobs report on Nov. 20, seven weeks late. It published some of the October data – including a count of the jobs created that month by businesses, nonprofits and government agencies – along with the November report Tuesday. But it did not release an unemployment rate for October because it could not calculate the number during the shutdown.