AI Job Replacement: Worker Worries

Tech companies cutting jobs are using more artificial intelligence, which is also disrupting the companies themselves. Amazon’s Chief Executive Andy Jassy said the e-commerce giant will likely reduce its workforce as employees become more efficient using AI extensively. Salesforce Chief Executive Marc Benioff said that AI is already doing 30% to 50% of the company’s work.

Anthropic, an AI startup, warned that AI could eliminate over half of entry-level white-collar jobs within the next one to five years. AI is reshaping, displacing, and creating roles, impacting the job market across sectors. This AI surge has caused anxiety among workers fearing job automation. A Pew Research Center report found that about half of U.S. workers are worried about AI's future workplace use, with few believing it will create more jobs long-term.

Major tech companies like Microsoft, Intel, Amazon, and Meta are cutting workers, pushing for efficiency, and promoting AI tools. These companies have introduced AI features that generate code, analyze data, develop apps, and handle tedious tasks.

Robert Lucido, senior director at Magnit, stated that AI is rewriting the rules of work, not just taking jobs. The extent of AI's disruption is debated. OpenAI executives have countered predictions of a massive white-collar job loss. Sam Altman, OpenAI’s chief executive, acknowledged the anxiety and potential pain but believes the world is significantly underemployed and needs more code than can currently be written.

Economic policies are creating unease, so companies are controlling costs and being more selective in hiring. Lucido said that companies are seeking “purple unicorns” instead of those they can train. Before ChatGPT's 2022 launch, tech companies used AI to curate posts, flag content, and power virtual assistants. ChatGPT's popularity intensified the competition to release more powerful AI tools.

Companies are investing in data centers to train and maintain AI systems. Economists and consultants are studying AI's impact on professions like engineers, lawyers, and analysts. Some suggest the change will be slower than tech executives predict. U.S. Bureau of Labor Statistics economists stated in a February report that job displacement from new technologies tends to take longer than expected.

AI can help develop, test, and write code, provide financial advice, and sift through legal documents. However, the bureau projects that software developers, financial advisors, aerospace engineers, and lawyers will experience faster-than-average employment growth from 2023 to 2033. Companies will need software developers to build and maintain AI systems. Tech executives have emphasized AI's coding abilities. Meta Chief Executive Mark Zuckerberg anticipates AI coding like a mid-level engineer by 2025, and Microsoft Chief Executive Satya Nadella noted that AI writes up to 30% of the company’s code.

Other roles may grow slowly or decline due to AI. The Bureau of Labor Statistics expects slower growth for paralegals and legal assistants, with decreased roles for credit analysts, claims adjusters, and insurance appraisers. McKinsey Global Institute predicts that up to 30% of current U.S. work hours could be automated by 2030. They expect increased demand for STEM roles in the U.S. and Europe but decreased demand for customer service and office support.

Anu Madgavkar, a partner at McKinsey Global Institute, noted that routine and predictable skills are easily automated. Generative AI can eliminate jobs through automation but also enhance technical, creative, legal, and business roles. Madgavkar anticipates hiring volatility, with success determined by rethinking workflows and jobs. Tech companies announced 74,716 cuts from January to May, a 35% increase from last year, according to Challenger, Gray & Christmas.

While layoffs have impacted the tech industry, the focus on AI could create new jobs. Companies cite various reasons for job cuts. Autodesk, which makes software for architects, designers, and engineers, cut 9% of its workforce this year. The company attributed the cuts to geopolitical and macroeconomic factors and AI investments, according to a regulatory filing. Block, an Oakland fintech company that cut 8% of its workforce in March, told employees the cuts were strategic, not due to AI replacement.

Diana Colella, executive vice president at Autodesk, acknowledged the uncertainty about future job roles. However, she believes AI will assist rather than replace humans or creativity. Companies are seeking AI expertise. Autodesk found a surge in AI mentions in U.S. job listings and rapid growth in roles like AI engineer, AI content creator, and AI solutions architect. The company partnered with GlobalData to analyze job postings across industries like architecture, engineering, and entertainment.

Workers have adapted to technology before. Colella said that encyclopedia salesmen shifted to selling other products when online search disrupted their role. She added that the skills remain important and can be applied to different products or services.