Instead they should optimize for keeping a job.

Since you mention Amazon, I work there as a senior software engineer (almost 10 years of tenure) and the quality of interns has massively degraded since LLMs are available. The result is that where the majority of interns used to receive return offers, now the vast majority doesn't.

Similarly, a lot of new grads get kicked out quickly, before the end of the trial period, because they suck. A lot more than in the past.