June 22, 2024
As layoffs deepen, AI's role in the cuts is murky – but it definitely has one

Layoffs season is extending into a sustained state, defying more typical formations of cyclical boom and bust periods in tech. Meanwhile, AI continues to be ascendant – or at least the current version of neural networks trained on large data sets that drives developments like OpenAI’s ChatGPT and Anthropic’s Claude. One topic keeps coming up in conversations I’m having with technologists, executives, industry leader and frontline workers on all sides of both trends: Specifically, how much the AI boom is complicit in the great and continued culling.

Everyone seems to agree that the advent and uptake of AI is playing some part in at least the scope of the layoffs, if not in the timing, which more likely is attributable to overall economic uncertainty. Companies are certainly crowing about the benefits in efficiency new AI products can and are bringing to businesses, but few actually mention them in the specific context of layoffs – though news about AI replacing at least some of those losing their jobs is making its way out despite efforts to keep that under wraps.

Salesforce is laying off around 700 people in its most recent tranche of job cuts, which adds to the group it announced it was cutting last year. SAP, too, announced a massive restructuring but stressed that it anticipates headcount will be the same by end of year. That’s a lot of massaging of the message, but the real story is that these massive companies would typically grow year-over-year, so even flat hiring with restructuring, some buy-outs and backfill hires is a step back from business-as-usual.

Both these companies, and many of the other massive tech firms currently suffering through layoffs have also signalled and/or announced sizeable investments in AI to help augment or replace work currently being done by people. Typically these announcements are accompanied by assurances that automating certain tasks will lead to actual human resources being deployed in roles and for jobs that are much more fulfilling, creative and meaningful.

Long-term, that may be the case, but right now it’s all ‘regrettable’ downsizing alongside massive, budget-busting spend on AI products and innovation, with no silver lining in sight about when those generate whole new roles and opportunities for those workers displaced in the meantime.

There are plenty of comforting examples out there of how generative AI is still lacking in many regards when it comes to comparing them with actual people – but there are just as many, if not more, examples of how people are happily using tools like ChatGPT for their real work everyday, with results that are at least satisfactory, if not better than what they were able to do before.

Technology revolutions are always disruptive and displace tons of people, but this one seems unique in that the technology it promises doesn’t just augment human efficiency in specific roles in all cases – it actively replaces an entire function in many. There’s a need for greater transparency about when AI will occupy roles people once did as these large companies continue their roll-out, but we’re unlikely to get that in the midst of the action: More likely it’ll be studied and uncovered later by researchers trying to assess the impact.

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