Bitcoin price today: sticks near $109k as traders await tariff fallout
Investing.com - A slew of companies have announced layoffs or redundancies following the emergence of artificial intelligence as a critical pillar of corporate strategy, exacerbating already elevated concerns that rampant automation could threaten jobs across a range of industries.
In June, media reports suggested that Microsoft (NASDAQ:MSFT) was planning to cut thousands of roles, especially in its sales division, as the software giant pushes to streamline its operations and squeeze out savings needed to fund investments in developing its AI capabilities.
The report came after Microsoft previously announced a sweeping round of culling that impacted around 6,000 employees, equivalent to 3% of its headcount -- with executives at the firm noting that as much as 30% of its code could now be written by AI.
E-commerce giant Amazon (NASDAQ:AMZN) and telecoms group BT have also said they anticipate AI will lead to efficiency gains that will give them enough room to roll out their own layoffs.
At the same time, an uptick in unemployment among recent U.S. college graduates, particularly in finance and computer science, is "indicative of entry-level roles becoming automated by AI," according to analysts at Capital Economics.
"[I]t is likely that we will see increasing numbers of AI-related job losses, especially in sectors at the AI frontline, such as software," they wrote in a note.
Top executives have even come under increased scrutiny over their ability to successfully deploy AI. A Harris Poll survey taken earlier this year found that pressure to deliver AI-driven gains is significant, with some 74% of CEOs in the study admitting that they could be out of work within two years if they fail to produce measureable AI returns. Nearly all of them felt that an AI agent could offer better or equal counsel to a human counterpart as well.
However, the Capital Economics analysts flagged that "AI is not the only thing" contributing to the rash of layoffs, arguing that some firms are using the nascent technology as "a way to spin job losses driven by poor financial performance in a more positive light."
Uncertainty around the outlook for the broader economy, stemming from the unclear effect sweeping U.S. tariffs and fiscal reforms, may be persuading companies to pull back on hiring, they added.
At the same time, they said that "not all news" related to AI has been "bad," citing a recent U.S. study which found that occupations most exposed to AI showed "no substantial difference in employment growth relative to the least exposed."
A certain amount of job losses are considered to be part of the normal turnover of the labor market as well, the analysts said. In the U.S., there tends to be between 1.5 million to 2 million layoffs per month when the unemployment rate is stable -- and this is often offset by job additions.
Meanwhile, as with previous technologies, new AI-related roles have been created, such as prompt engineers or officers who monitor the ethical considerations of automation, the Capital Economics analysts said.
AI improvements may also make workers more productive, potentially leading to a "rise in demand" for their services, the analysts claimed, adding that the "relatively gradual pace" of AI adoption suggests that the "temporary adverse labor market effects should be minor."
As a result, "fears of a big long-term rise in ’technological unemployment’ are misplaced," the analysts argued.
"While there could still be significant temporary disruption in the labor market, the slow pace of AI adoption currently makes that unlikely," they said.