AI Job Cuts: Real Threat or Just Tech Industry Shake-Up?

Amazon, one of the world's largest online retailers, announced this week that it will be cutting thousands of corporate jobs. This news has made many people worry that Artificial Intelligence, or AI, is starting to take over jobs that humans used to do. Amazon is not the only company making these changes. Chegg, an online education company, said it would reduce its workforce by 45 percent, blaming the 'new realities' of AI. Salesforce, a company that helps businesses manage customer relationships, cut 4,000 customer service jobs last month, saying that AI agents were now doing much of the work. UPS, the delivery company, also cut 48,000 jobs since last year, and its CEO said machine learning was part of the reason.

However, some experts are not convinced that AI is the main reason for all these job losses. Martha Gimbel, who leads the Budget Lab at Yale University, says that company-specific reasons often play a big role in layoffs. She believes that people are so worried about AI's impact on jobs that they may overreact to news from individual companies. Gimbel points out that certain groups, like recent college graduates and data center workers, are more at risk from AI. A study from the Federal Reserve Bank of St Louis found that jobs with more AI have seen higher unemployment since 2022. Morgan Frank, a professor at the University of Pittsburgh, studied unemployment by job type and found that only office and administrative support workers were affected after ChatGPT was launched in late 2022. For computer and math jobs, there was no big change. Frank says both tech and office workers are facing a tougher job market, but he doubts AI is the only reason.

Amazon and other tech companies hired a lot of people before and during the pandemic, especially when interest rates were low. This led to more jobs, but now, as the economy changes, companies are cutting back. Gimbel says that these hiring and firing patterns are normal for big companies, and not just because of AI. She thinks it is important to figure out which job losses are caused by the economy and which are caused by AI. For example, if there is a recession, jobs in human resources and marketing might be lost, and those jobs are also exposed to AI. Amazon said it wants to be more efficient and use AI to help. The company is very good at using new technology, so it can automate jobs faster than others. Experts say Amazon might stop hiring for some roles if AI can do the work. Even if the total number of jobs changes, the types of jobs people do will change as well.