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AI is likely a factor at Amazon, though not simply because some work tasks get offloaded to chatbots. Amazon, Microsoft Corp. and Oracle Corp. have all taken steps to trim and constrain expenses in other parts of their businesses while ramping up spending for data centres, chips and talent to support more powerful artificial intelligence systems.
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But the recent spate of announcements about AI-related cutbacks does offer some hints of sweeping job displacement that critics of the technology — and even its evangelists — have long warned about. Over the past year, AI has progressed from chatbots that spit out clever responses to so-called agents designed to field more complex tasks on a user’s behalf, whether it be conducting research or writing code for hours at a time.
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“AI is starting to eat repetitive, high-volume work,” said Mike Doonan of SPMB, which recruits senior tech and data leaders. One large client, he said, laid off its U.S.-based customer service staff and moved many customer interactions to AI tools, cutting costs.
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On an earnings call in late October, executives at C.H. Robinson Worldwide Inc. talked up “growing automation” for order entry, appointment scheduling and other manual tasks that have allowed the logistics firm to “decouple headcount growth from volume growth.” As a result, the company said its average headcount was down 10.8 per cent year-over-year in the most recent quarter. Investors cheered the outcome.
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In a panel discussion earlier this year, International Business Machines Corp. chief executive Arvind Krishna said AI could streamline the process of handling contracts with clients, cutting the need for hundreds of staffers to be involved. Separately, Krishna said his firm has used AI agents to replace the work of hundreds of HR staff, though he said IBM has hired more in other areas. In August, IBM said it’s on pace to reach US$4.5 billion in savings from AI and automation by the end of this year.
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Even when companies aren’t saying AI helps eliminate jobs, they are mentioning it as a reason to raise the bar on new hires. In an internal memo earlier this year, Shopify Inc. chief executive Tobi Lutke told employees that “teams must demonstrate why they cannot get what they want done using AI” before asking for additional headcount.
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“We’re slowing down the hiring in jobs that are, quite frankly, soul-crushing jobs,” ServiceNow Inc. chief executive Bill McDermott told Bloomberg News in July. Instead, that work is being done by AI agents, he said. “They work hard 24/7. You don’t have to pay ’em. They don’t need any lunch and they don’t have any health care benefits.”
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Still, it’s early days for agents and generative AI. Top AI developers are working to build software that can help automate more work done by research analysts, junior bankers, consultants and software engineers. At the same time, AI companies are trying to provide more clarity on the economic benefits of their tools amid lingering skepticism of the technology’s potential to do more than produce unhelpful “workslop.”
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“There’s uncertainty about how useful the tools are and how to fit them into daily work,” said Tom Case, a recruiter at Atticus Growth Partners. “They are getting better, but the playbook is still developing.”
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If tech firms can ease that uncertainty, it may open the door to wider corporate AI adoption — and more AI-induced cutbacks. Already, Goldman Sachs projects that AI will lead clients to cut headcount by four per cent in the next year, with that figure expected to rise to 11 per cent in the next three years.
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The investment bank appears poised to join the trend. Last month, Goldman Sachs told employees to expect more job cuts this year as it works to “fully benefit from the promise of AI.”
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—With assistance from Miranda Davis.
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English (US)