It is difficult to say how many jobs have been lost, or will be lost in the future, due to AI. But in the tech and financial sectors, concerns about the annihilation of AI jobs are growing greater than ever.
The other week, it was a viral paper from Citini Research that envisioned a dystopian near-future scenario in which large portions of the workforce were made obsolete by AI that sent Wall Street into shivers. A few weeks before that, Anthropic’s new cloud cowork AI agent triggered a massive stock selloff over fears that it could automate tasks like legal work, leading to billions of dollars in losses. Tech leaders have warned about AI’s potential to disrupt the job market for years, but it’s only in recent months that the atmosphere has felt so tense.
Additional fuel was added to the fire when last week, Block CEO Jack Dorsey announced that his fintech firm, formerly known as Square, was laying off 4,000 employees, or nearly half of its workforce. Although Dorsey blamed overhiring caused by the pandemic for the layoffs, he also enthused that “intelligence tools” were creating “a new way of working” with smaller teams.
This set off alarm bells throughout the industry Roundup of reactions by wall street journal. “Square is just the beginning,” former Meta and Salesforce executive Clara Shih wrote on X, responding to a longer post claiming that the block layoff is “the first AI cut.”
“You won’t need to do as many jobs as we’ve given humans over the last 20 or 30 years,” said Amazon CEO Andy Jassy. said in one cnbc Interview When asked about the cuts identified by Dorsey WSJ.
The fears are legitimate, but likely overblown at the present time. It cannot be denied that companies are laying off a large number of employees and it cannot be denied that many of them are openly enthusiastic about AI. One report found that AI was cited in more than 54,000 layoff announcements last year. Those employers include Amazon, which is set to lay off 14,000 workers after claiming “efficiency gains” from deploying AI at the company.
But are autonomous systems really replacing those jobs? Experts caution that officials could use AI as an excuse to justify cuts motivated solely by financial reasoning, a phenomenon that is being dubbed “AI-washing.”
Marcelo P. Lima, founder and managing partner of Heller House, disputed alarmists’ claims that Dorsey’s cut into the block was AI driven, calling them “the new Citini fake narrative.”
“Everyone will assume Jack Dorsey…is doing this because of AI,” he said written on x. “He isn’t.”
Lima explained that the reality was that the company was already bloated. Like many tech companies, it hired thousands of new employees during the pandemic, increasing its workforce from 3,900 in 2019 to 12,500 in 2022.
There is also little evidence that AI systems are currently capable of playing human roles in any strong sense. Several studies have shown that even the most capable AI agents fail at common white-collar tasks, while providing little economic benefit: A widely cited MIT study found that 95 percent of companies that integrated AI saw no meaningful increase in revenue. An additional body of research has demonstrated how AI can negatively impact human employees, reducing efficiency and even speeding up work.
Still, the fear of something is often more harmful than the thing itself, and if the market is continually influenced by the still-unexplored potential of AI to disrupt, if not upend, the job market, it could lead to economic uncertainty in the years to come.
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