Is AI Responsible for Job Cuts - Or Just a Good Excuse? (cnbc.com) 45
Has AI just become an easy excuse for firms looking to downsize, asks CNBC:
Fabian Stephany, assistant professor of AI and work at the Oxford Internet Institute, said there might be more to job cuts than meets the eye. Previously there may have been some stigma attached to using AI, but now companies are "scapegoating" the technology to take the fall for challenging business moves such as layoffs. "I'm really skeptical whether the layoffs that we see currently are really due to true efficiency gains. It's rather really a projection into AI in the sense of 'We can use AI to make good excuses,'" Stephany said in an interview with CNBC. Companies can essentially position themselves at the frontier of AI technology to appear innovative and competitive, and simultaneously conceal the real reasons for layoffs, according to Stephany... Some companies that flourished during the pandemic "significantly overhired" and the recent layoffs might just be a "market clearance...."
One founder, Jean-Christophe Bouglé even said in a popular LinkedIn post that AI adoption is at a "much slower pace" than is being claimed and in large corporations "there's not much happening" with AI projects even being rolled back due to cost or security concerns. "At the same time there are announcements of big layoff plans 'because of AI.' It looks like a big excuse, in a context where the economy in many countries is slowing down..."
The Budget Lab, a non-partisan policy research center at Yale University, released a report on Wednesday which showed that U.S. labor has actually been little disrupted by AI automation since the release of ChatGPT in 2022... Additionally, New York Fed economists released research in early September which showed that AI use amongst firms "do not point to significant reductions in employment" across the services and manufacturing industry in the New York-Northern New Jersey region.
One founder, Jean-Christophe Bouglé even said in a popular LinkedIn post that AI adoption is at a "much slower pace" than is being claimed and in large corporations "there's not much happening" with AI projects even being rolled back due to cost or security concerns. "At the same time there are announcements of big layoff plans 'because of AI.' It looks like a big excuse, in a context where the economy in many countries is slowing down..."
The Budget Lab, a non-partisan policy research center at Yale University, released a report on Wednesday which showed that U.S. labor has actually been little disrupted by AI automation since the release of ChatGPT in 2022... Additionally, New York Fed economists released research in early September which showed that AI use amongst firms "do not point to significant reductions in employment" across the services and manufacturing industry in the New York-Northern New Jersey region.
On the other hand ... (Score:2)
workweek over the past 150 years (Score:2, Interesting)
https://www.scry.llc/2024/12/2... [scry.llc]
it's very likely that we'll see a substantial reduction in the standard workweek.
Re:workweek over the past 150 years (Score:4, Insightful)
Some see their work weeks cut to zero hours. I think that's they are calling "job loss".
Cover story - CEO Tenure Length (Score:4, Insightful)
https://corpgov.law.harvard.ed... [harvard.edu].
CEO Tenure Rates are under 5 years per Harvard's study.
That means a newly hired CEO has 4 or 5 years of needing a "Grand Transformational Narrative" to keep the analysts favorable to the company.
Hype the latest trend, parrot what Gartner and McKinsey is selling as the next great thing, continually cut costs, and slowly buy back your stock is not a viable long term business plan.
No they can't - they needed an excuse (Score:5, Interesting)
... if the companies have been wanting to do it, and if they economically can do it, then whether they have a useful PR "excuse" or not, it's still going to happen.
So long as FAANG perceived that their success was based on eternal growth and attracting the best talent money can buy, they couldn't do layoffs. Layoffs are for old tech companies like IBM and Oracle. We're cool...we're hip...we give free lunches and have nap pods in our office and silly, crazy perks those "old" companies would never do...we're cool!!!...join our club...if you don't, you're just a loser, like all those IBM-ers.
Their real fear is they'd miss the AI or whatever future hype bubble because all the cool kids would go to a competitor that doesn't downsize. If the employer is the buyer, we're seeing a shift from a seller's market to a buyer's market. This is both due to interest rate hikes and 2 decades of largely unchecked growth at these behemoths...Facebook has all the engineers they need to run their shitty sites...same with Google. Prior to the rate hike, they had all they needed, but didn't want to lose top talent to their competitors. Elon did a reckless bloodbath at Twitter a year or 2 earlier and survived, so they colluded and layed off massive amounts of dead weight at the same time.
The most charitable narrative for AI is that they're hoping future AI will increase productivity enough that their existing staff would be able to add workload instead of adding headcount. Everyone who has used these AI tools knows it doesn't actually increase productivity tangibly enough to change your staffing.
Re: (Score:3)
Layoffs are for old tech companies like IBM and Oracle.
Not for IBM, at least until a few decades ago. You could get fired for cause, but layoffs were unheard of. Things did change in the 90s though.
Re:No they can't - they needed an excuse (Score:5, Interesting)
As regards IBM it was earlier than that, though they disguised it a bit. The first layoffs were actually some people at an IBM printer factory in Lexington, Kentucky. Hence Lexmark printers. Must have been around 1983? Major discussion topic during one of my early stints at the big blue place... It wasn't the first time IBM had sold (or shut down) a factory (or office), but it was the first time when the IBM employees were not given any option to remain with the company. Not that those options were always a good deal, since they had often required relocations to odd places.
Going into ancient history, but it's funny. Do you know how IBM got through the Great Depression without laying anyone off? As I read it (in several sources), Senior moved lots of people into sales and the main thing they were selling was office equipment to help OTHER companies lay off more people. Not unlike the AI companies of today, eh? However now that tactic may turn the timing around and help create the Greatest Depression?
Moving to more recent history now... I saw the beginnings but I do wonder what has happened after I left. My last long stint in the big blue joint was mostly about "transitioning" the work force. As I "interpreted" the changes, the new foci on quick onboarding and smooth offboarding were about reducing the number of "lifetime" employees. Rather than build the company around long-term people with loyalty and all that silly jazz, the new idea was to have a lean kernel of meta-managers and super-salespeople, while the actual work would be done by short-term contractors brought in for specific projects and sent out as soon as the projects were completed and paid for. (But at least my age spared me the indignity of training my AI replacement?)
Re: (Score:3)
IBM transitioned most of their workforce to "low cost geographies", mainly India. As of last year IBM employed about 270,300 people globally. Only about 50,000 were working in the United States.
Re: No they can't - they needed an excuse (Score:2)
Re: (Score:2)
I read the book and can also recommend it, but with reservations. I don't think Black had enough technical background to fully understand the structural relationships between data and algorithms, so he didn't sufficiently pursue the algorithmic side that could be ferreted out of the data. Unfortunately the algorithms were rarely documented and by the time he was working on the book the people who knew the algorithms were gone. I strongly suspect that many of those people didn't even appreciate what they wer
IBM has been a legacy company for 30 years (Score:3)
Layoffs are for old tech companies like IBM and Oracle.
Not for IBM, at least until a few decades ago. You could get fired for cause, but layoffs were unheard of. Things did change in the 90s though.
Since the late 90s when I started my career, IBM was famous for Layoffs and just most of the world not knowing what they did. Like I've heard of DB2 and WebSphere...never actually seen them used anywhere I've been. EVERYONE was on a competitor to IBM: either open source or Oracle or MS...but never IBM. We know about mainframes and stuff...but no, during entire modern software era...let's say since the introduction of the smartphone, IBM has had lots of layoffs and if they have had success, it's been well
Re: (Score:3)
I think a big part of this is that a lot of companies (especially big tech) massively overhired during corona, making critically needed personnel be unavailable, nearly crashing the economy, and fully crashing the labor market.
Them saying 'AI made them redundant' sounds a lot better to the people in charge than basically admitting that they were total idiots for hiring so many people they had no work for in the first place.
They pushed hard to get a lot of people into tech and then rugpulled them, insanity.
Glad the article mentioned overhiring (Score:2)
I seem to recall big companies hiring and paying engineers to ride the bench 3 or 4 years ago.
Re: (Score:2)
I was on the bench at WIPRO for almost a year. It was a pretty sweet gig. Full pay, no work. Eventually they cut me loose though.
What do you mean "or"? (Score:2)
In some cases it's one thing, in some cases it's the other, in some it's even both — someone is looting a company and the people they're replacing are crucial. They can claim they were suckered in by AI companies' promises.
Re: (Score:3)
I agree with you and I want to add some examples.
Here is a story from 2016 how a cucumber farmer automated cucumber sorting with AI. I want to mention this, because many think that only LLMs are AI, but there are much simpler implementations of AI also that replace tasks and those have been around for a long time. Replaced tasks mean less need for workers:
https://cloud.google.com/blog/... [google.com]
Bigger example would be Amazon. If Amazon didn't have robots and AI doing work in their warehouses, they would have to em
Thinning the herd (Score:2)
At least in my direct experinece, I've not been surprised by any of the cuts made that I see. AI is a likely excuse, but you'll find direct attribution from official sources scarce.
Most of these cuts are performance based. Companies are getting lean, and if you're not going to lean in or are in core business adjacent roles, you're on the block.
Both (Score:5, Interesting)
At the same time large swaths of customer service reps are being replaced. The quality of the customer service doesn't matter because there has been so much market consolidation and there is so little competition left that you can't really go somewhere else because of bad customer service. Wherever you go it's owned by the same people and they're doing the same things.
So Salesforce firing 4000 customer service reps to replace them with chatbots is real.
On the other hand the company that makes my antihistamine drug fired all there sales reps which is made it stupidly difficult to get my drug because those sales reps did a lot of leg work for the doctors that isn't getting done. Those layoffs are real and very stupid and shortsighted.
Re: (Score:2)
At the same time large swaths of customer service reps are being replaced. The quality of the customer service doesn't matter
The quality never mattered. That is why they are being replaced.
Put Competition back in the market (Score:2)
And that's with just four players left in the market. Imagine if they were five or 10 or 15? There used to be dozens of small credit cards out there.
And that's just credit cards consolidation has hit literally everything.
Your
Re: (Score:2)
Your life is worse than it was 20 years ago not because of some blue haired community college professor that won't let you say the n word. It's because billionaires took 50 trillion dollars out of the economy while you were worrying about blue haired Community College professors.
Actually life is pretty good here. I don't like the direction society is going but it won't be my problem so I don't care. Billionaires are lucky they can firewall themselves from the stupidity of the masses. I don't think a world run by average people would be better.
Re: Both (Score:2)
It is not just layoffs. Everything good that is happening, is happening because of AI. Better sales, better efficiency, better bottom line etc, all because of AI. Why, because everyone will buy it. Otherwise you have to provide another story, and it might attract scrutiny.
AI (Score:1)
Re:AI (Score:5, Insightful)
Of course they're blaming AI for headcount cuts now... the "COVID excuse" ran out by mid 2021, and the "inflation excuse" became stale by 2024.
I guess that you could use the "tariff excuse", but then you risk offending Trump supporters. So... AI it is!
Re: (Score:2)
Skilled jobs (engineers for example) being replaced by AI will be filled with warm bodies again, but in lower cost centres of excellence such as Romania, India, China.
The work from home experience has shown that it's perfectly reasonable to have teams spread over different time zones due to tools like MS Teams that make collaboration easy.
I'd not want the project manager role, though, with conf. calls at 5AM and 8PM...
On the contrary (Score:2)
Ask the Leftovers. (Score:3)
I’d say the answer lies in those left behind still doing the very-much-still human jobs that require more than a ToddlerAI touch. Are they cruising along just fine without their human co-workers lost to typhoon RIF and hurricane Headcount? Today’s Human Stress index reading Fully Medicated, says hell no.
Are we seeing stock-padding whispershit talk in America like 996 schedules? The Seasoned Slack Picker Uppers getting screwed out of life itself working sloppy second and third shifts barely awake in a zombie state while consumers question why Quality is in the shitter across a spectrum wider than autism?
Ask the greedy asshat filing 996 schedules under “executive bonus strategies”.
Good excuse (Score:2)
I have heard several claims that the only real jobs the AI can cut are Middle Management jobs. AI is supposedly really good 95% of the time for their work, and the 5% of time they get it wrong, good Upper Management can stop the problem before it gets too big.
Some people say it can also do it for upper management with the CEO acting as the break. But no one seriously thinks upper management is going to replace themselves.
Current AI is not ready... (Score:5, Insightful)
...to do all of the things that the hypemongers predict.
Expert workers selectively use AI tools where they are genuinely helpful.
Clueless noobs believe the fiction that they can "vibe code" their way to riches.
Clueless executives believe the hype pitched by lying salesweasels and pay way too much for immature tech that fails to work as promised.
Add to that the overall economic chaos and it's not surprising to see the results.
It's complicated
Law of clickbait headlines, paragraph 2 (Score:2)
When question includes multiple variables and suggests that they're mutually exclusive when they're not, the answer is "yes, all of the variables".
Natural selection (Score:1)
Everyone who uses AI knows its an excuse (Score:5, Interesting)
1. We overhired in the past and overestimated the demand for our product and we're cutting staff to ensure we remain solvent for upcoming economic headwinds (like tariffs and visa upheaval)
2. We're going AI, baby! We don't need as many humans!!!...because our investments in AI TOTALLY payed off and are legit and can help YOU cut staff too!!!!
No (Score:2)
Job cuts are the responsibility of the decision-makers who decide to make those job cuts, not some piece of technology being used by the company.
Assigning responsibility to AI is no different than assigning responsibility to hard drives.
If AI could replace tech jobs wholesale... (Score:3)
It seems like we'd be seeing lots of startups with only one or two employees (CEO / CFO), with an AI workforce - which doesn't seem to be the case.
We DO hear about a lot of "AI" startups, but they boil down to marketing - selling repackaged / customized versions of ChatGPT and the like.
Re: (Score:3)
Interestingly, if AI lived up to the hype, those startups we don't see would staff their CEO / CFO with AI first. If you had limited "super-human intelligence" wouldn't you want to apply it to the post important decisions of a startup first?
Meanwhile, all we really see being replaced by AI is propaganda generation. Society is evolving to be non-merit-based, the best liar wins. The best liars will be AI-assisted, the best truth-tellers won't be.
AI was responsible for the cuts, because ... (Score:2)
AI was largely responsible for the job cuts, because it gave companies a good excuse to cut their belly flab and make them appear like they were at the cutting edge of AI, giving their stock prices a big boost and a great quarterly bonus to their executives.
Re: (Score:2)
The companies would have made the job cuts regardless. Stating that they were due to AI was a move to save the executives' jobs, not the reason for the layoffs. By blaming AI, the executives could claim to the financial backers that they were finding efficiencies, rather than failing to meet their goals.
Give it time (Score:1)
Horse breeders didn't vanish the moment the model T was put on the market. Horse breeding peaked 7 years after the model T was launched. The web took about 5 years to hit 100 million users after Netscape Navigator 1.0. In contrast, ChatGPT had 100 million users in 2 months, easily an all-time record. It's a revolution, and yes, its going to take all the jobs. Get over it.
Re: (Score:2)
This is true, but it's also OK. New technology has been replacing jobs for centuries, but it always takes time. In the meantime, people find new things to do for compensation, just as the farmers and the factory workers of past decades, found other work.
Is it bitcoin/blockchain or Model T? (Score:3)
Horse breeders didn't vanish the moment the model T was put on the market. Horse breeding peaked 7 years after the model T was launched. The web took about 5 years to hit 100 million users after Netscape Navigator 1.0. In contrast, ChatGPT had 100 million users in 2 months, easily an all-time record. It's a revolution, and yes, its going to take all the jobs. Get over it.
That's a terrible comparison and you know it. It had 100 million users??...how many paying users?...not many, eh? It's somewhat easy to get 100 million users to hit an interesting free website. It's VERY hard to get 100 million people to PAY MONEY to get internet service. ChatGPT has been around almost 4 years now and all we hear are promises. If it COULD cut jobs, it would...tangibly. 4 years is the difference between NO commercial internet and EVERYONE having an ecommerce site. 4 years is the diffe
it's a false choice. (Score:2)
AI is clearly not responsible for job cuts, and it is a good excuse. But corporations don't need proven AI before making job cuts, Progandize CEOs, get them to fire their work force, then they will buy your AI garbage regardless of what it does. It's one more outsourcing move, the value is never proven beforehand.
Using AI at work (Score:2)
My employers recently signed up for a ChatGPT account and I've been seeing how it can help me.
I remain responsible for the big picture, for actually making apps that work on iOS and Android. I've found ChatGPT helpful for refining details. It saves sifting through years worth of Stack Overflow postings. It's a handy tool, but it won't replace me any time soon.
If you say "Chat GPT" in French it sounds like "chat j'ai pété" ("cat I farted"). I guess I need to get out more...
...laura
Employers are General Dumb (Score:3)
I have worked in many organizations over my 30+ year career and one thing I learned is that the modern corporate ecosystem, on average, encourages the incompetent (more or less) to rise in the ranks of management. I know a lot of you have also learned this. The way to succeed is mostly just make sure you can blame others for failures and don't get in trouble. Above all, their like things that save them time. AI looks like it can do that for them.
However, I've already seen in my own work place and the work places of others I talk with situations where developers were fired with AI to replace them. It failed and they then started trying to rehire the lost positions. Sometimes, they really are just looking for reasons to get rid of certain individuals. The executives are those often more interested in firing to save money. In those cases, it's usually more random or whole departments.
This all said, I develop AI tools and refine models all day long. I also use AI to code for me. I do find it useful but it took me a lot of time and work to learn how to use it effectively. It really does require skill and knowing where and how LLM models screw up. For example, don't just tell them what you want have them make it. Give detailed descriptions of the tools, protocols, coding style, etc. Then design the tables/columns, the API calls, etc. Design your software at each layer and have it build each layer and test and debug each layer comprehensively before moving on. Then, in the next layer, tell it not to edit the other layers. Or at least, tell it not to modify the regression tests for the previous layers. It will give up on bugs and try to hide them or belittle their importance, etc. Force it to fix them... keep trying until it gets it.