A recent report by a US-based global outplacement and career transitioning firm cited, among other reasons, artificial intelligence (AI) as one of the reasons for job cuts.
According to Challenger, Gray & Christmas, Inc, as many as 3,900 people working with the US-based companies lost their jobs because of artificial intelligence.
The leading cause of layoffs, according to the report, is market/economic conditions. Other reasons include cost-cutting, restructuring, acquisition and merger, and AI. Besides, 46,900 who were laid off this year were not offered a reason.
In May alone, US-based employers laid off 80,089 people, of which 3,900 were because of AI. This is a 287 per cent increase from the same month last year when companies announced 20,712 cuts.
So far this year, companies announced plans to cut 417,500 jobs, a 315 per cent increase from the 100,694 cuts announced in the same period last year, the report said. This is the highest job cuts in January-May since 2020, when 1,414,828 people were laid off.
Every industry, except education, government, industrial manufacturing, and utilities, announced layoffs this year.
The technology sector announced the most cuts this year and in May (136,831 and 22,887 respectively) followed by the retail sector, automobile sector, and financial firms. Media industry announced 17,436 cuts so far in 2023, the highest year-to-date (YTD) on record.
“Consumer confidence is down to a six-month low and job openings are flattening. Companies appear to be putting the brakes on hiring in anticipation of a slowdown,” Andrew Challenger, labour expert and senior vice president of Challenger, Gray & Christmas, Inc, said in the report.
According to Business Insider, this is the first time AI has been included as a reason for job cuts. Challenger, Gray & Christmas expects this trend to continue although some of the companies may be unwilling to reveal that they are laying off their employees and eliminating roles because of AI.
Goldman Sachs had, in a recent report, said AI could replace 300 million full-time jobs globally, which is one-fourth of the current jobs.
“Despite significant uncertainty around the potential of generative AI, its ability to generate content that is indistinguishable from human-created output and to break down communication barriers between humans and machines reflects a major advancement with potentially large macroeconomic effects,” the report had read.
