- Layoffs are widespread in the tech industry, and some are blaming AI.
- However, there is little evidence that AI is driving mass industry cuts.
- AI instructors say they need to look more closely at other factors that could be the cause.
Concerns that AI will lead to layoffs are becoming increasingly common, especially as the technology is increasingly used on a daily basis.
Several reports indicate that this technology will, or already has, an impact on the workforce.
Duolingo laid off 10% of its contractors in January. At the time, a representative told Bloomberg: “We just don't need as many people to do the types of work that some contractors were doing. Part of that is due to AI. Maybe,” he said. It added that the layoffs were not a “direct replacement” of workers with AI.
Swedish fintech company Klarna The company's CEO said a month ago that it had frozen hiring and that AI would fill the gap in talent if attrition occurs.
While we may continue to hear more about the use of AI in tech companies, it would be an overstatement to say that the era of AI-related layoffs has already arrived.
“War against robots is a great cover story,” said Fabian Stefani, who lectures on AI at the Oxford Internet Institute. “But if you look closely, it's often due to simple economic dynamics like outsourcing and lead managers cutting costs and increasing salaries elsewhere.”
However, it is unlikely that this technology will play a direct role in a wide range of industries.
lack of evidence
Industry leaders are eager to demonstrate to investors that they are ready and willing to leverage technology.
A Gallup poll last year found that 72% of chief human resources officers at Fortune 500 companies believe their jobs will be replaced by AI in the next three years.
But despite all the noise about replacing workers with robots, there is little clear evidence that this is actually happening.
Stefani said AI still plays an “ambiguous” role in the labor market. “We're not automating large-scale jobs. At the end of the day, we're just enhancing and automating certain things.”
Before mass layoffs hit the tech industry again in January, there were already reports that companies were starting to implement their own AI technology.
The Information reported in December that Google was starting to rely more on machine learning technology to help customers buy ads.
The development caused anxiety in the advertising sales department, which later faced job cuts, according to the report. A company spokesperson told Business Insider's Hugh Langley that the reorganization has nothing to do with AI tools.
Freelancers and independent workers have expressed doubts that language-based AI like ChatGPT is taking away their jobs, but companies suffering a wave of layoffs have generally condemned the technology. I'm refraining from that.
change of focus
While AI may not simply replace workers, companies' investments in AI development may be causing cuts in other areas.
As Fortune's Jeremy Kahn points out, many of the jobs that will be eliminated will generally not be because AI replaces the need for human workers. In the layoffs memo, most mentions of AI center around refocusing or doubling down on investment in hot technology.
For example, SAP announced: Last month, a new AI-focused restructuring plan was announced. This change affected employment for approximately 8,000 employees.
Wedbush Securities technology analyst Dan Ives told CNBC. that Job cuts are likely to continue throughout the year, primarily as companies focus on spending in the AI sector. For example, recruiting new AI talent is expensive and competitive.
Inevitably, AI will be used more frequently among technology companies, but AI will be used as a scapegoat for layoffs when other, more familiar factors could play a role for AI. It is necessary to pay attention to
A Duolingo representative said in a statement to BI: “As of the end of 2023, Duolingo had not renewed approximately 10% of its contractor workforce, in some cases because the contractor's project ended or the contractor's work was no longer needed.” More than 100 The way you generate and share content between language courses has changed. ”
It added: “In all cases, we sought to find alternative roles for each contractor before terminating the contract as a last resort.”
Khurana declined further comment on the company's hiring freeze.
