Artificial intelligence is responsible for far more layoffs than companies admit

United Parcel Service Inc. recently laid off the largest number of employees in its 116-year history. According to CEO Carol Toma, this was made possible by new technologies, including artificial intelligence. She cited just one example where machine learning allows salespeople to prepare proposals without needing guidance from pricing experts.

UPS is among a growing number of companies that are looking at AI from two different angles: on the one hand, they are showing investors how AI allows them to do more with less, while at the same time avoiding scaring people away from direct integration of technology and layoffs. A UPS public relations representative said that AI is not replacing employees and that management did not confirm an explicit link between artificial intelligence and layoffs during the results presentation to investors.

BlackRock Inc. announced a wave of layoffs last month, with 600 jobs at stake. CEO Larry Fink and President Rob Kapito told employees that dramatic changes are occurring in the industry, and perhaps the biggest is how new technologies are affecting all industries.

Experts cannot come up with an exact estimate of how many jobs have been lost due to the rapid development of artificial intelligence. According to data from Challenger, Gray & Christmas Inc. since last May, companies in the US have reportedly laid off 4,600 people to free up resources to hire people with UI experience or because technology has replaced performing tasks. However, Senior Vice President Andrew Challenger added that this estimate is "certainly underestimated" and that the real figure is much higher.

"In all probability, there are more jobs in the economy that AI displaces than those that it creates. Every time the company mentions anything related to this area, it appears in the media. That's why companies don't want to expose themselves", says Challenger.

Last spring, International Business Machines Corp. made all the headlines when their CEO Arvind Krishna told Bloomberg that they planned to halt hiring because certain jobs he believed would soon be replaced by UI. An IBM public relations representative said the company has no plans to freeze hiring and plans to maintain headcount.

Johnny Taylor, executive director of the Society for Human Resource Management, said he thinks many of these cuts will happen quietly. "IBM was the first to go public with such an announcement, and it cost them quite a bit," said Taylor in an interview in December. "The others then said 'We won't announce it, we'll just do it.' We will reduce the number of employees."

Many companies could do exactly that by slowing hiring significantly, he added. "When we wake up in three years, we will see much leaner organizations. They will simply replace you without much announcement”, says Taylor.

The biggest hit to tech jobs

Apart from IBM, only a handful of companies have explicitly confirmed the connection between the introduction of artificial intelligence and layoffs. freezing of employment.

Last December, the Swedish company Klarna Inc. predicted just that, with tools like OpenAI's ChatGPT expected to reduce the time for certain tasks. CEO Sebastian Siemiatkowski told the Telegraph that they needed fewer people to do the same amount of work. "The most appropriate thing for us at the moment is to say that we are not hiring at the moment and we are waiting to see how things unfold", he said Klarna's public relations representative.

In January, Duolingo Inc. became one of the most popular language learning apps. decided not to renew the contracts of approximately 10 % contractors. "We simply no longer need as many people to do the work that the contractors were doing. In part, this can be attributed to artificial intelligence", a representative of Duolingo told Bloomberg. In addition, he pointed out that Duolingo is still hiring for various roles. The company also announced that none of the full-time employees were fired and that this was not a direct replacement of employees with artificial intelligence, which many regularly use for their work.

All these companies that we have highlighted so far are not the only ones that think alike, although most of them do not say it out loud. Three out of four Fortune 500 companies that participated in a Gallup survey last year claim that they see how artificial intelligence will begin to replace employees within three years.

"Let's stop pretending - jobs will disappear due to artificial intelligence", says Bob Tahooney, director of human resources management at insurance company Allstate Corp. He added that in his statement he was referring to the entire market and not specifically to their company. "Jobs will be lost as well as upgraded", he concluded.

For his department, Tahooney offered an example of how artificial intelligence will change the work of HR development teams. As he himself says, the previously three-week content creation process can now be done in an hour or two.

In the technology industry, some of the biggest CEOs have warned that artificial intelligence will eliminate certain jobs. Elon Musk has even predicted that at some point we will get so far that no jobs will be needed anymore.