Jobs across corporate America have been placed on the chopping block as the artificial intelligence revolution takes hold. Even senior management and long-serving executives have found themselves in a perilous situation as companies leverage the technology to streamline operations and create more agile organizations.
But AI isn’t solely to blame. Experts tell FOX Business that many of the job cuts are also driven by the tough economic climate and companies trying to correct course after the COVID-19 pandemic-related hiring surge.
“Hiring was very elevated immediately following the pandemic, and some firms are now right-sizing their workforce,” Laura Ullrich, Indeed’s director of economic research for North America, told FOX Business.
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Simultaneously, automation and AI are beginning to replace routine professional tasks in areas such as media, software development, data analysis and marketing, which is effectively “reducing the need for large white-collar workforces,” Ullrich said.
Exacerbating the issue is slower revenue growth in some sectors. In turn, Ullrich said, “employers are trimming white-collar roles first, where productivity gains can be captured without disrupting physical production or customer-facing operations.”
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Debra Andrews, founder of marketing firm Marketri, told FOX Business that the issue is that companies are trying to reconcile two pressures at once.
“Those being shareholder demands for efficiency and the growing belief that AI can deliver it instantly,” Andrews said.
But that reality isn’t so palatable. Ed Elson, a business analyst and co-host of the “Prof G Markets” podcast, argued that society is too fixated on the optimism often associated with artificial intelligence’s long-term promise, which contrasts sharply with the technology’s short-term reality.
“Conventional AI wisdom has been that, over the long-term, it won’t take your job – that it will be so value accretive that it will make all of our lives better and more productive,” Elson said. “However, the reality of the short-term is now setting in. And the reality of the short-term is that AI will take your job.”
These layoffs, he said, “are proof of that.”
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Amazon announced this week that it would cut 14,000 corporate jobs as part of an internal restructuring.
Shipping giant UPS disclosed in a regulatory filing that it laid off about 48,000 workers this year just after Target announced it was cutting about 1,000 corporate positions and eliminating 800 open roles in an effort to speed up business decision-making and drive growth under its new chief executive, Michael Fiddelke.
Nestle, the world’s largest packaged-food company, announced in mid-October that it is trimming its workforce by 16,000 over the next two years as it seeks to “substantially” reduce costs under its new CEO, Philipp Navratil. Meanwhile, General Motors warned staff as recently as this week that it will indefinitely cut hundreds of roles in the near future as it adjusts to slowing demand for electric vehicles.
This is happening from small businesses to large corporations. Garrett White, entrepreneur and CEO of Wake Up Warrior, a privately held leadership and personal development company, told FOX Business that he has already cut entire copywriting divisions and replaced about half of his coding staff.
“AI is now showing the world that you can get more done more efficiently… by eliminating positions that are no longer useful, like bookkeeping,” White said. While that reality is hard to grasp, the purpose of a company is to produce profit.
Elson said that these layoffs show how the broader conversation needs to shift.
“The lesson is that we should all spend less time philosophizing about how AI will change society over the long-term, and more time understanding how it will change society in the short-term,” Elson said. “Its short-term effects are clear: It is decimating white-collar information work, and reducing entry-level opportunities for young people.”
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