Are AI Job Cuts Just the Beginning? Examining the Impact of Automation on Employment

The AI Job Cuts Are Here – Or Are They?

Big names in business have cut jobs. The news makes people worry about what AI will do to work. Amazon said it will cut about 14,000 office jobs this week. Other companies such as Chegg and Salesforce also point to AI when they cut jobs.

AI Linked to Job Cuts

Chegg cut nearly half its staff on Monday. Its leaders said that new ways of using AI made the change needed. Salesforce dropped 4,000 client support roles last month. Its chief said AI tools now do many of these tasks. UPS has cut over 48,000 jobs since last year. Its boss told us that their use of machine learning played a part.

This news makes many think that AI is shrinking the need for people at work.

Experts Advise a Careful Look

Some experts ask us to take a slow look at the story. Martha Gimbel, who leads the Budget Lab at Yale University, says that many other factors can change job numbers. She warned that using a few bosses’ words does not show the true role of AI in job cuts. Fears about AI may cause us to read too much into single company moves.

Who Is at Risk?

Studies show that some workers may lose jobs to AI more than others. New college students and workers at data centers may feel this risk keenly. A report from the Federal Reserve Bank of St. Louis found that jobs with a lot of AI show a rise in unemployment since 2022. One study found that office and support roles took a hit after ChatGPT started in November 2022. These workers saw a jump in claims for unemployment early in 2023. In jobs like computer work or math, no big jump happened. It is hard to say if AI alone is at fault when the job market is tougher today.

Economic Cycles Matter Too

Recent job cuts also line up with wider money trends. In the tech field, hiring ran high in the early COVID days, helped by near-zero interest levels. Today, when rates have gone up and AI grows, companies adjust their teams. This pattern fits with how companies normally add and drop workers when the money climate changes.

Ms. Gimbel said the talk feels new only because AI is in the spotlight. She sees that the way companies add and drop staff now is similar to past cycles.

Amazon Leads in AI Use

Amazon draws a lot of eyes. The company said it must work with fewer staff to make the best of AI. Amazon reported strong sales last month. This news hints that the job cuts are about a shift toward AI, not weak sales.

Economists like Enrico Moretti from UC Berkeley say that big tech, including Amazon, both makes and uses AI. This puts them in a strong spot when it comes to changes at work. Lawrence Schmidt at MIT Sloan School said that Amazon can switch roles faster than many others. As AI grows, workers may move into new positions. Job totals may change, but roles shift with AI progress.

The Road Ahead: Separating AI Use from Other Trends

In the future, it will be hard to tell which job cuts come from money trends and which come from AI. In a deep slow-down, jobs in areas like HR or marketing might be hit hard by both AI and the economy. This mix makes it hard to pin the blame on one cause.

Experts agree that we must keep watching to know what AI means for work. Many urge us not to mix normal economic changes with shifts tied to AI alone.

Related Recent Developments:

• Amazon confirmed 14,000 office job cuts.
• Amazon apologized for a recent AWS outage.
• Amazon introduced early models of AI smart glasses for its drivers.
• Big tech firms such as Meta, Alphabet, and Microsoft have boosted their spending on AI as market trends shift.

As AI grows, firms, workers, and rule makers keep an eye on how work will change. New job cuts now seem to come from both new tech and normal money cycles. Each word and link in the story helps us see a clear picture without jumping to quick answers.

This article is based on work by Danielle Kaye for the BBC and includes views from experts and new studies on AI and work.