During the concluding year, over 1 million individuals in the U.S. were subjected to workforce reductions, marking the highest figure since 2020, reported CNBC, citing data from the consulting firm Challenger, Gray & Christmas. Furthermore, 55 thousand jobs were eliminated due to the adoption of AI technologies. A number of major corporations, including Amazon and Salesforce, shed thousands of positions, citing AI as one of the reasons.
In October, American firms announced cuts totaling 153 thousand jobs, and in November—more than 71 thousand dismissed personnel. According to Challenger, AI was behind over 6 thousand layoffs that month.
However, not everyone attributes the sharp job reductions solely to AI. For instance, Fabian Stephany, an associate professor of AI and a fellow at the Oxford Internet Institute, previously told CNBC that this might merely be a pretext. In his view, many companies that achieved strong results during the pandemic “significantly overhired,” and the current dismissals could simply be a “market correction.”
“To some extent, this is letting go of people for whom there was no sustainable long-term prospect, and instead of saying, ‘We miscalculated two or three years ago,’ now they can seek scapegoats by saying, ‘But it’s all about AI,'” he added.
In October, Amazon announced the largest staff reduction in its history, letting go of 14 thousand employees, explaining this by the drive to invest in its “biggest priorities,” including AI. Microsoft scaled back approximately 15 thousand roles by 2025 and announced a reduction of 9 thousand positions, or 4% of its workforce, in July. Microsoft CEO Satya Nadella communicated in an internal memo that the company needed to “reimagine” its “mission for a new era,” further emphasizing AI’s importance to the firm.
Salesforce CEO Marc Benioff confirmed in September that 4 thousand customer support staff were let go following the integration of AI. In the summer, he stated that AI was already handling up to 50% of the work within the company.
In November, IBM announced a 1% global workforce reduction, which could affect almost 3 thousand personnel. Yet, IBM head Arvind Krishna noted that the company increased hiring in other areas requiring more critical thinking, such as software development, sales, and marketing, although in May he mentioned that AI chatbots had taken over the work of several hundred HR employees.
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