Companies across various sectors are increasingly citing artificial intelligence as the reason behind recent job cuts, from tech giants to airlines. However, critics and experts argue that AI is being used as a convenient excuse to mask other business decisions, such as overhiring during the pandemic or broader economic restructuring.
Key Takeaways
Many companies are attributing layoffs to AI adoption, citing efficiency gains and technological advancements.
Critics suggest AI is a "good excuse" to avoid admitting to past miscalculations like overhiring or to conceal other strategic shifts.
Evidence of widespread job displacement directly caused by AI is currently limited, with some research indicating AI is more likely to augment than replace jobs on a mass scale.
Concerns are rising that the narrative around AI-driven layoffs could fuel employee anxiety and hinder career mobility.
The AI Justification
Firms like Salesforce, Accenture, and Lufthansa have announced significant workforce reductions, with AI often named as a primary driver. Salesforce, for instance, stated that its AI agent could handle a substantial portion of customer support work, leading to layoffs in that department. Similarly, Lufthansa plans to leverage AI for increased efficiency, impacting thousands of jobs by 2030.
However, academics and industry observers are questioning the direct causality. Fabian Stephany, an assistant professor at the Oxford Internet Institute, suggests that companies are "scapegoating" AI to justify challenging business moves. He posits that AI provides a modern, innovative-sounding rationale for layoffs that might otherwise be attributed to less favourable reasons, such as poor financial performance or strategic missteps.
Overhiring and Economic Realities
Some experts point to the period of rapid growth during the COVID-19 pandemic, during which many companies significantly overhired. Recent layoffs, in this view, are a "market clearance" or a correction for unsustainable hiring practices. Companies may be using AI as a convenient way to avoid admitting to these past errors in judgment.
Furthermore, a founder of Authentic.ly, Jean-Christophe Bouglé, noted in a LinkedIn post that AI adoption is proceeding at a slower pace than often claimed, with some AI projects even being rolled back due to cost or security concerns. He suggests that the widespread announcements of AI-driven layoffs might be a "big excuse" in the context of a slowing global economy.
Limited Evidence of Mass AI Displacement
Research from institutions like Yale University and the New York Fed indicates that AI has not yet caused widespread job losses in the US labour market. Studies examining labour market data since the advent of advanced AI tools have found minimal disruption. While AI is being used to reduce hiring in some areas and retrain employees in others, direct replacement of workers on a mass scale is not yet evident.
Economists acknowledge that AI will lead to structural unemployment for some roles, but the current trend does not suggest an imminent end to human work. Historically, technological advancements have often led to the creation of new jobs and industries, rather than outright elimination of work.
Feeding Employee Fears
Careers experts warn that companies are not being transparent about their AI implementation, which fuels employee anxiety. When companies openly state that layoffs are due to AI, it intensifies fears of job replacement and can be seen as "feeding the frenzy."
Companies are urged to be more responsible in their communication, setting a tone that avoids "greenlighting bad behaviour." While some firms like IBM claim to be reinvesting savings from AI automation into new hires, the overall narrative suggests a complex interplay of technological advancement, economic pressures, and corporate strategy, with AI often serving as the most convenient, albeit not always accurate, explanation for workforce reductions.