The AI job cuts are here - or are they?

BBCAmazon's move this week to slash thousands of corporate jobs fed into a longstanding anxiety: that Artificial Intelligence is starting to replace workers.The tech giant joined a growing list of US companies that have cited AI technology as a reason for layoffs.But some question whether AI is entirely to blame—and have voiced scepticism that recent high-profile layoffs are a telling sign of the technology's impact on employment.Chegg, the online education firm, cited the "new realities" of AI as it announced a 45% workforce reduction on Monday. When Salesforce cut 4 000 customer service roles last month, its chief executive said AI agents were doing the work.UPS said on Tuesday that it has cut 48 000 jobs since last year. The delivery company's chief executive previously linked redundancies, in part, to machine learning.But extrapolating from executives' remarks during cuts is "possibly the worst way" to gauge AI's effects on jobs, said Martha Gimbel, executive director of the Budget Lab at Yale University.Company-specific dynamics, she said, are often at play."There is a real tendency, because everyone is so freaked out about the possible impact of AI on the labour market moving forward, to overreact to individual company announcements," Gimbel said.Specific subsets of the workforce - recent college graduates and data centre employees, for example - are, in fact, particularly vulnerable to the technology's adoption.A recent study from the Federal Reserve Bank of St Louis found a correlation between occupations with a higher prevalence of AI and increases in unemployment since 2022.But Morgan Frank, assistant professor at the University of Pittsburgh, has studied unemployment risk by occupation and found that the only workers affected by the launch of ChatGPT in November 2022 were in the office and administrative support sector.For them, their probability of claiming unemployment jumped in early 2023, he said, immediately after the OpenAI chatbot entered the chat.But for computer and maths occupations, "there is no discernible change in the trend around the launch of ChatGPT", he said."Both tech workers and admin workers - they're in a rougher job market than they were in a couple of years ago," Frank said."I'd be sceptical that AI is the reason for all of it, though," he added.'Typical patterns' of hiring and firingAmazon and many of its tech-sector rivals hired at a rapid clip in the years leading up to the coronavirus pandemic and in the pandemic's early months, when the Federal Reserve lowered US interest rates to near zero.The hiring set these firms up for eventual workforce reductions, experts said—a dynamic separate from the generative AI boom over the last three years.The Fed also started hiking interest rates around the time that ChatGPT was launched."A lot of this conversation feels very different to people because the phrase AI is in it," said Gimbel, of the Budget Lab."But so far, nothing that I've seen looks different than typical patterns of companies hiring and firing, particularly at this point in an economic cycle."A big question, she added, is what hiring patterns look like when the economy returns to a period of solid growth.In the long run, Gimbel said, distinguishing between cyclical and AI-driven job losses will be crucial. If, for instance, the US economy were to fall into a recession, human resources and marketing jobs would be the expected casualties.Those jobs, though, are also exposed to AI, complicating the task of identifying whether the cuts are due to macroeconomic conditions, to the adoption of technology, or to both.Amazon is at the forefront.Amazon, which confirmed it plans to cut roughly 14 000 corporate roles, said it needs to be "organised more leanly" to seize the opportunities AI offers.The company has been performing well. It reported quarterly results in July that beat Wall Street expectations on several counts, including a 13% year-over-year increase in sales to $167.7bn (£125bn).Enrico Moretti, an economics professor at the University of California, Berkeley, said that the largest tech companies like Amazon are at the forefront of AI-related job cuts, "in part because they're both producers and consumers of AI".Still, he acknowledged that a correction following robust hiring during the pandemic also may have driven the company's latest round of layoffs.Amazon is likely able to automate jobs faster than most of its rivals because of its scale, said Lawrence Schmidt, an associate professor of finance at the MIT Sloan School of Management."It's not at all crazy to think that Amazon might want to shed certain types of roles, or refrain from hiring additional people in certain types of roles, if they can be quickly automated," Schmidt said."Regardless of what happens to counts of jobs overall," he added, "you would expect there to be reallocation."

The AI job cuts are here - or are they?

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Namibian Sun 2025-11-04

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The AI job cuts are here - or are they?

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Namibian Sun 2025-11-04

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