In the last few months, many well-known companies have announced layoffs of thousands of employees. Above Said it was getting rid of 48,000 employees. Amazon There is a loss of Rs 30,000. intel Firing 24,000. IBM, Target, to shelter, accenture And ford Thousands more are being eliminated. The list goes on.
And the culprit? According to many media reports, this is Artificial Intelligence.
“AI destruction of millions of jobs begins,” saysyahoo finance“Thousands of white-collar jobs are disappearing due to the decline of AI,” the report said.wall street journal“AI could take your job,” it warns.the new York Times“The nation’s largest employers are putting their employees on notice,” says Washington Post.
Automation will eliminate jobs! Robots are destroying the world! the end is nigh!
These stories get clicks. But the truth is that AI is not the reason behind most of these job cuts. In fact, AI – at least so far – is not working as well as hoped.
a recent survey Published by KPMG Of more than 48,000 business people around the world, only 46 percent trusted their AI systems. A similar survey Developers – and these are people who would know – revealed that only one-third trusted the output of their AI-powered development tools, a number that has been declining since the technology’s early years. “Almost perfect” is a phrase often heard.
multiple news outlets Recently there have been reports on “workslop” generated by AI chatbots. This includes blurry logos, redundant text, generic or unpolished writing, and poor coding, which has forced companies to hire more freelancers to perfect the final product, which is the fault of AI, with many finding that it’s much easier for a human worker to just do the job themselves.
“In April 2024, it looked like agentic AI was going to be the next big thing,” writes Steven Newman, an AI expert. “There has been huge progress on many fronts over the coming 16 months, but little progress on real-world agency.”
According to a recent news New York Times report, 80 percent of large companies that invested in AI projects this year said they saw “no significant bottom-line impact,” while 42 percent abandoned their efforts. At the same time, a mit study found that 95 percent of AI pilot programs “failed to deliver measurable break-even impact” and only 5 percent of these pilots were achieving rapid revenue acceleration.
“The 95 percent failure rate for enterprise AI solutions represents a clear expression of the GenAI divide.”writesZvi Moshowitz, a former hedge fund manager and longtime AI commentator. “Organizations stuck on the wrong side continue to invest in static tools that may not adapt to their workflow, while focusing on learning-enabled systems that cross the divide.”
there are lots of surveys That’s how many small businesses are adopting AI. But according to one of my customers, HR Firm PaychexAI is not replacing workers; Recruitment has remained stable last year. And I think I know why – I couldn’t even create A simple image using one of three popular AI chatbots. I need more workers to fix these problems!
This doesn’t mean that AI isn’t having an impact. Bots are now doing a lot of the coding work in big tech companies, which is why they are replacing developers. Other AI systems are automating customer service and helping workers be more productive by creating policies, writing emails, and analyzing spreadsheets.
As the technology emerges from its 1.0 phase, when there is a reliable infrastructure in place and the inevitable bubble bursts that cleans out the bad ideas and the companies that never deserved their funding, what is left will be the applications and agents and hardware – drones, robots, sensors – that will actually use AI to do work in place of humans. But I don’t know anyone who is replacing their employees with AI in the near future.
Which brings me back to jobs. If it’s not AI, what’s really behind all these layoffs? It’s simple: good old-fashioned corporate mismanagement. Just ask Andy Jessie.
“The announcement we made (about layoffs) a few days ago was not really financially driven and it’s not really AI driven, not yet,”SaidJassi, CEO of Amazon. “You end up with a lot more people than before, and you end up with a lot more layers. Sometimes without realizing it, you can dilute the ownership of the people you have who are doing the real work and who own most of the decisions across the two-way door.”
Or listen to Target’s Michael Fiedelke.
“The complexity we have created over time is holding us back,” SaidThe current COO and soon-to-be CEO of Target. “Too many layers and overlapping work has slowed down decisions, making it harder to bring ideas to life.”
What Jussi and Fidelke are really saying: We messed up. We hired more than we needed. We changed our mind. We hired the wrong people. Our predictions were wrong. We did not anticipate the slowing economy, higher costs, rising tariffs, supply chain disruptions, consumer behavior, interest rate increases and many other factors that led to these poor decisions.
When companies make mistakes and hire too many people or the wrong people, they wait for the right moment to lose weight. This usually happens when there is a financial downturn or recession because it is easy to blame. In this case, it’s the AI bubble. It’s a much easier story to tell to your shareholders and the public that management’s actions are the result of smart technology investments rather than foolish, strategic mistakes. And news outlets support their claims for clicks.
So for the most part the cute, scary story of AI taking away jobs isn’t really accurate. The real reason for these layoffs is the same boring reason as before: fixing bad decisions.
Gene Marks is the founder of The Marks Group, a small-business consulting firm.
