Tech workers across the industry are bracing themselves for the possibility of being replaced by artificial intelligence (AI), as a wave of layoffs hits companies looking to improve efficiency. IBM’s announcement on Monday that it was pausing hiring on roles that it believed could be performed by AI leaves 7,800 jobs at the tech giant risk of being eradicated. The move follows a trend of tech firms turning to AI to plug gaps, with ChatGPT leading CEOs to question whether generative AI could change fundamental ways in which businesses operate.
While some business leaders have argued that AI can create new jobs, the wider consensus is clear: AI is set to make jobs extinct. In a recent Morgan Stanley note, analysts suggested that AI could slow future growth in headcount while enhancing the productivity of a shrinking workforce, regardless of whether jobs lost through recent layoffs return. In tech, over 350,000 people have already lost their jobs since last year, according to online tracker Layoffs.fyi.
Here are five tech firms that have acted first with a big bet on AI:
1. IBM: CEO Arvind Krishna said in an interview with Bloomberg that the company would be pausing hiring for roles that it deemed could instead be done by AI, including roles in back-office areas such as HR, with an estimated 7,800 jobs potentially lost in total.
2. Amazon: The company has been bruised by the downturn of 2022 and has already announced two rounds of layoffs affecting 27,000 workers. During an earnings call last week, CFO Brian Olsavsky said that the company was “adding more dollars for large language models and generative AI” while simultaneously “spending less year-over-year” on core fulfillment and transportation, freeing up resources for its giant profit machine, Amazon Web Services.
3. Dropbox: The company announced in April that it would be laying off around 16% of its workforce, or 500 workers, with CEO Drew Houston acknowledging in a letter to employees that “the AI era of computing has finally arrived”. While he did not explicitly state that AI would replace workers, the layoffs coincided with Dropbox’s renewed focus on the technology.
4. Meta: Mark Zuckerberg has been explicit about the need to save every cent possible, coining the term “year of efficiency”. In March, he said that his “single largest investment is in advancing AI” while building it into every one of its products. The company has already closed 5,000 open roles and will no doubt consider the efficiencies that AI can offer over human workers.
5. Microsoft: The company already has a track record of replacing workers with AI, having fired some workers overseeing news homepages it managed in 2020 and replacing them with robots. Microsoft is now fueling the development of OpenAI’s large language model, having announced a multi-billion dollar investment. CFO Amy Hood recently announced that its revenue for the three months to March beat expectations thanks to “focused execution” from sales teams and partners, with Bloomberg reporting in February that Microsoft’s salespeople would use AI from OpenAI in a key customer-relationship app to help with time-consuming tasks.
As the tech industry grapples with tough economic conditions, it seems that AI is here to stay as a solution for improving efficiency. While some jobs may be eradicated completely, it remains to be seen whether new roles will emerge in this new era of AI-dominated computing.