Amazon.com has become the latest in a list ofcompanies that will be downsizing because of artificial intelligence (AI) andautomation eliminating the need for thousands of jobs.
However,as a percentage of the global workforce, the number of jobs currently beinglost to AI is minuscule.
Alan Cohen, a data analyst at personal finance and trading education platform RationalFX, says more than 202 000 people have been laid off in the technology industry so far this year. This is based on figures in the public domain.
Cohen estimates job losses for the full year will amount to more than 244 000 roles.
Should AI-related job cuts reach a million this year, that works out to 0.3% of the global workforce of 3.63 billion people, based on World Bank figures.
This week, Beth Galetti, Amazon senior vice-president of people experience and technology, wrote in a blog post that the company is reducing its workforce by around 14 000 people. “We’re working hard to support everyone whose role is impacted.”
That post followed one by CEO Andy Jassy, who told staff in mid-June that AI would mean a leaner workforce. “As we roll out more GenAI and agents, it should change the way our work is done. We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs,” he wrote.
Even before Amazon’s announcement, the New York Times, based on internal documents, reported that Amazon aimed to replace as many as 500 000 jobs through AI.
The megacap – the world’s fifth most valuable company – told the publication that the information it had was limited and not the entire picture. Spokesperson Kelly Nantel told the publication it planned to hire 250 000 people for the coming holiday season, although it didn’t indicate whether those roles would be permanent.
AI is not just affecting the technology sector. ITWeb’s research, based on data in the public domain, shows that other companies, such as Nestlé and UPS, have also been downsizing. Nestlé will reportedly let around 16 000 staff go, with UPS having cut 48 000 jobs so far this year.
Other reports indicate McKinsey has cut 5 000 roles because of efficiencies as the result of AI.
All told, media reports indicate that more than 20 000 jobs have been cut in Europe and 25 000 in the US this month alone.
World Wide Worx MD Arthur Goldstuck notes thatmost of the current hype around job cuts as the result of AI is because largeand listed companies are being named in reports.
Real value
Goldstuck notes, however, that AI is showing companies where true production value lies.
“We’re seeing both a wave of job cuts and a reordering of work itself. AI has become a kind of mirror, showing companies where human effort was genuinely creating value and where it was just keeping the lights on. That’s unsettling, because it forces us to confront how much of modern work has been about process rather than purpose,” says Goldstuck.
The January World Economic Forum Future of Jobs report found that shifting global trends in technology, economy, demographics and the green transition are projected to generate 170 million new jobs by 2030, while displacing 92 million others – a net gain of 78 million roles.
While AI will lead to job gains in the technology sector, it will also see employment created in “core economy roles, including delivery drivers, care roles, educators and farmworkers,” the forum says.
Independent ICT commentator Adrian Schofield says what needs to be considered is that “we all bought in to the notion that, in the medium- to long-term, job losses would be outweighed by job gains, by as much as 50%”. However, there is no meaningful measurement of that cycle yet, he notes.
“Trends such as generative AI and rapid technological shifts are upending industries and labour markets, creating both unprecedented opportunities and profound risks,” said Till Leopold, head of work, wages and job creation at the World Economic Forum.
Decisions, decisions
Goldstuck says the current environment is an inflection point. “The organisations that treat this as a cost-cutting exercise will hollow themselves out; the ones that see it as a redesign moment will emerge stronger, more creative and, I sincerely hope, more human.”
AI isn’t inherently extractive, meaning it is not automatically about siphoning away human value, says Goldstuck. “If we use it merely to replace humans, we’ll erode trust. If we use it to elevate roles and tasks, we could redefine what meaningful work looks like.”
“Jobs for mundane routine activities are disappearing across the board. It’s an outcome of the industrial/technological age(s),” says Schofield.
There is a lack of recognition, maybe deliberately, that there are more factors influencing the jobs market than AI, adds Schofield. “Particularly in America and to a lesser extent in Europe, economies are under enormous pressure, lacking meaningful growth while requiring more social support.”
Share