How artificial intelligence is influencing tech-sector layoffs and reskilling

 

A Wave of Layoffs in the Tech Sector

In March, employees in IBM’s marketing and communications division were informed of significant layoffs, highlighting a growing trend of job cuts across the tech industry. Major companies like Amazon, Apple, and Meta have also announced layoffs, with at least 74,000 workers being let go by 255 tech companies in 2024 alone, according to layoffs.fyi.

Balancing Profit and Workforce Impact

The rise of artificial intelligence (AI) has sparked concerns similar to those experienced during the Industrial Revolution. Tesla founder and CEO Elon Musk has suggested that AI could make employment a luxury, stating, “You can have a job if you wanted to have a job for personal satisfaction, but the AI would be able to do everything.”

Corporations, driven by the need to satisfy shareholders, often cut jobs to boost profits. The competitive nature of the tech industry makes the cost-saving and efficiency-enhancing benefits of AI particularly attractive.

IBM’s Shift Towards AI: Layoffs and Upskilling

In January 2023, IBM announced it would cut 3,900 positions. By August, the company revealed plans to replace 8,000 jobs with AI. CEO Arvind Krishna later stated that IBM would “massively upskill all of our employees on AI.” This indicates a clear link between the layoffs and the shift towards AI, aiming to enhance efficiency and profitability.

The Debate on Embracing AI

Experts and CEOs have varied predictions about AI’s future. While some see AI as a revolutionary technology akin to the factory line or the internet, its full implications are not yet clear. AI can be seen as the “800-pound gorilla” in every C-suite, symbolizing both potential and uncertainty.

A working paper from MIT in January found that only 23% of worker wages for vision tasks are currently attractive to automate, suggesting AI job displacement will be substantial but gradual. Asana’s 2023 report on The State of AI at Work emphasizes a “human-centred AI approach,” advocating for worker participation rather than displacement. However, Asana also noted a “crisis in AI transparency,” with only 32% of employees feeling informed about their company’s AI use.

Other predictions are more pessimistic. The Chicago Booth Review called for policy and program-heavy approaches to minimize negative outcomes for workers, though such measures come with their own challenges, including development time, compromise, and additional costs.

Preparing for the Future

Despite uncertainties, one clear takeaway is that AI will become increasingly valuable for companies. Organizations need to be agile in hiring, training, and restructuring, including upskilling workers. While AI can learn from itself, it requires human oversight to align with a company’s goals.

Job losses will occur, but new opportunities will also arise as AI reshapes the workforce. Companies must be ready to navigate economic volatility and the shifting landscape of venture capital investment. Training, upskilling, and redefining roles will be crucial.

In the tech sector, companies must be prepared to adapt to changes brought by AI. Job cuts may be inevitable, but new types of workers will be needed. Organizations need the right tools or partnerships to navigate these transitions effectively, ensuring they can respond to the evolving demands of the industry.

Source: trainingjournal.com

 

Hipther

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