Mint Primer | Behind the job cuts: Is AI the real reason?
Despite strong profits, tech giants have been cutting jobs citing AI and automation. But the pandemic, shifting strategies and investor pressure are also at play. As firms rebrand restructuring as AI-led transformation, here’s a closer look at the true drivers.
Why are we talking about job cuts?
At present, the outlook is mixed. The World Economic Forum (WEF)’s Future of Jobs 2025 report predicts 170 million new jobs this decade, but 92 million will be lost. One in four jobs globally is exposed to generative AI (GenAI), says a May 20 study by the International Labour Organization and Poland’s National Research Institute. Google has laid off 12,000 workers since 2023, including 200 in May. Microsoft, Amazon, and Duolingo are also downsizing, while Meta cut 5% of its workforce in February—even as Mark Zuckerberg has offered $100 million sign-on bonuses to lure top AI talents.
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What are leaders saying about this?
Anthropic CEO Dario Amodei warns AI could halve entry-level white-collar jobs and push unemployment to 20% in five years. Geoffrey Hinton echoes the risk of mass white-collar job losses. Microsoft CEO Satya Nadella links layoffs to AI-focused restructuring, while Alphabet CEO Sundar Pichai cites a push for efficiency. Amazon CEO Andy Jassy says AI agents will reduce some roles. InMobi CEO Naveen Tewari predicts 80% of coding will be automated by 2025. OpenAI’s Kevin Weil and Zerodha CTO Kailash Nadh believe junior developers face the greatest risk. Nvidia CEO Jensen Huang believes AI will shift, not erase, jobs.
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Are all job cuts due to automation and AI?
Tech layoffs began after the pandemic-era overhiring. Post-lockdown, many reevaluated and downsized. By end-2022, 263,000 global tech workers were laid off, with another 167,600 in Q1 2023, per Statista. While AI’s impact on future layoffs remains unclear, automation is expected to replace many manual, rule-based tasks, potentially leading to more layoffs in tech.
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Which jobs will rise, and which are at risk?
Frontline jobs like farmworkers, delivery drivers, and care workers are set to see the highest volume growth, while tech roles in AI, fintech, and big data will grow fastest by rate, according to WEF. Clerical roles—cashiers, bank tellers, and data entry clerks—will face sharp declines. By 2030, 39% of workers’ skills will be outdated, demanding constant upskilling. In-demand skills will include AI, big data, cybersecurity, and tech literacy, alongside soft skills like creative thinking, resilience and a commitment to lifelong learning.
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How can we prepare for what’s ahead?
WEF says 59% of workers will need upskilling by 2030. Former White House strategist Steve Bannon warns AI-driven job losses, especially in entry-level roles, will become a key political issue by 2028. Karnataka says it will study AI’s workforce impact to guide policy. Anthropic CEO Dario Amodei proposes a “token tax" on AI profits for redistribution, while some experts push for Universal Basic Income. Meanwhile, companies may need to rethink fully outsourcing tasks to AI agents that still blur fact and fiction.
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