Layoffs by big brand companies like Google, Amazon, and UPS are increasingly being tied to the direct use of artificial intelligence.
UPS bounced 12,000 company employees, the biggest cuts in the transport giant’s 116-year history, as company officials imply AI could replace more job responsibilities inside UPS, and that goes for management, too. CEO Carol Tomé pointed to the company’s investment in machine learning, which could help staffers create sales and marketing proposals without needing corporate finance specialists to come up with pricing figures.
“We are going to fit our organization to our strategy and align our resources against what’s wildly important,” Tomé said. “It’s a change in the way we work.”
It’s not only UPS. A burgeoning number of U.S. companies are finding they can deploy artificial intelligence to do more with less, even if they don’t want to directly admit AI is replacing employees.
IBM caught some flack after company officials said they’d bring in more AI tools and less workers in announcing a recent hiring freeze. Buy now, pay later company Klarna also announced a hiring pause as it boosted AI spending.
“We need fewer people to do the same thing,” CEO Sebastian Siemiatkowski said in announcing the job cuts. “The right thing for us is just to say: ‘let’s not recruit now, let’s see how this plays out.’
AI-Fueled Job Cuts Are Mounting
So far, AI has directly replaced about 4,600 workers lost to job cuts, according to Challenger, Gray, and Christmas. Even that figure is “certainly undercounting” senior vice president Andrew Challenger noted in an interview with Fortune.
“There are probably more jobs in the economy that are being cut because of AI already than are getting attributed to that or announced. Every time a company mentions it, they get headlines across every news outlet for like a month,” Challenger noted. “They would rather go under the radar most of the time.”
“The big thing you’ll hear companies say is they’re not focused on elimination, but augmentation — trying to make people more effective and efficient,” Challenger added. “But clearly there are a lot of scenarios right now where one person could do the work of four or five people with the help of AI in a way they couldn’t a year ago. That’s playing out on the ground even if we’re not hearing about it in big announcements from organizations.”
So far, the data shows little impact from directly related AI job cuts. But that doesn’t mean companies won’t act when they see what the technology can do, productivity-wise.
According to a new study by Tech.co, a technology news platform, 53% of respondents whose organizations use AI state “they’ve had no impact on removing job roles within their organizations.”
Yet the same study noted the “most popular” AI tasks for role replacement. That list includes supply chain management assets (71%), legal research (65%), predictive maintenance of fixed (64%), inventory management (63%), and financial analysis (63%).
Brian O’Connell, a former Wall Street bond trader and best-selling author, is a prominent figure in the finance industry. With a substantial background as an ex-Wall Street trader, he has authored two best-selling books: ‘The 401k Millionaire’ and ‘CNBC’s Creating Wealth’, demonstrating his profound knowledge of finance and investing.
Brian is also a finance and business writer for esteemed national platforms and publications, including CNN, TheStreet.com, CBS News, The Wall Street Journal, U.S. News & World Report, Forbes, and Fox News.
