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So Far, AI Isn’t Stealing Jobs From Humans, But Its Development Is Causing a Lot of Layoffs

  • U.S. companies have laid off 5,430 workers directly or indirectly because of AI.

  • Artificial intelligence job openings increased by 12% in May.

So far, AI isn’t taking jobs from people, but Its development is causing a lot of layoffs
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If you ask Big Tech CEOs about the layoffs of the past few months, they’ll probably tell you that it was all about strategy and efficiency. Just look at Meta CEO Mark Zuckerberg's public statements. None of them will tell you that it’s because of AI.

This is partly true because, at the moment, no AI is replacing the people that companies have fired. In a roundabout way, however, AI is the reason the tech industry is laying off some of its workers.

A change in direction: Companies no longer need certain employees. Aaron Damingos, a customer support team member at Microsoft’s online store, received an email inviting him to a meeting with his supervisor and other company representatives. As he posted on his TikTok profile in a video, he thought the calling was to fire him. He was right. Ultimately, the customer support employee was laid off as part of Microsoft’s latest round of 1,500 dismissals.

Damingos, who posts his day-to-day job search on LinkedIN following his layoff from Microsoft, says he doesn’t believe AI is directly responsible for the loss of his job, but does believe it was the strategic reason. “I think the shift toward AI work has unfortunately led to the deprioritization of some essential customer-facing roles. I helped people understand how to effectively use and understand the products,” Damigos states in one of his videos.

In an email leaked to Business Insider, Jason Zander, Microsoft’s executive vice president of strategic missions and technologies, purportedly admitted: “Our clear focus as a company is to define the AI wave and empower all of our customers to adopt this transformative technology successfully. Along the way, we make decisions aligning with our long-term vision and strategy while ensuring Microsoft’s sustainability and growth.”

AI won’t take your job, but its evolution might. Predictions suggest that, in the short-term, it’s improbable that an AI will take your job. However, the headlong rush by major tech companies to achieve a more advanced artificial intelligence than their competitors is forcing these departments to assess their resources.

As Damingos points out in his videos, companies previously used AI resources to go into product design and provide better customer service. Now, however, the focus is on internal development, so any jobs that don’t have AI as an end goal are at risk of being eliminated. As a result, companies like Google have significantly cut their design departments and reassigned many engineers to other AI-focused divisions.

The return of outsourcing. One effect of deprioritizing the user experience, something that many tech companies appear to be doing, is the return of the massive outsourcing of labor to low-wage countries. Without needing to control the result of a physical product, such as a cell phone or laptop, tech companies use outside labor to develop their AI with programmers from countries like Mexico or India.

Asim Husain, the head of Google’s developer ecosystem, confirmed this in an internal email obtained by CNBC: “We intend to maintain our current global footprint while also expanding in high-growth global workforce locations so that we can operate closer to our partners and developer communities.”

Companies don’t create or destroy jobs: They just transform them. According to a report by Challenger, Gray & Christmas, AI was a factor in 800 out 2,184 layoffs carried out from January to April of this year. Last year, U.S. companies fired 5,430 workers directly or indirectly because of AI.

In contrast, sources at CompTIA, a nonprofit trade association for the IT industry  consulted by Wired, say job openings related to artificial intelligence rose 12% in May. “AI will probably spur investment in other areas,” CompTIA research director Tim Herbert said.

The responsibility of companies. Alphabet-CWA Workers Union president Parul Koul believes that companies are failing in their responsibility by training the employees they already have under contract to perform new tasks for AI development rather than laying them off and hiring others.

“There are ways in which the existing workforce can be kept whole or treated with dignity and respect through this process. More opportunities for retraining and moving people to other divisions would be very welcome,” Koul told Wired.

Image | Unsplash (Igor Omilaev, Arif Riyanto)

Related | In the AI Era, Microsoft Will Need Those Who Turned Their Backs on It in the Mobile Era: Developers

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