It’s difficult to say how many jobs have been lost to AI, or will be lost in the future. But in tech and financial circles, anxieties over an AI jobs apocalypse are running higher than ever.
The other week, it was a viral paper from Citrini Research imagining a dire near future in which vast portions of the workforce are outmoded by AI that had Wall Street quivering in its boots. Weeks before that, Anthropic’s new Claude Cowork AI agent sparked a mass stock selloff over fears that it could automate tasks like legal work, wiping out billions of dollars. Tech leaders have warned of AI’s potential to disrupt the job market for years, but it’s only in recent months that the atmosphere has felt so high-strung.
Additional fuel was thrown onto the fire when, last week, Block CEO Jack Dorsey announced that his fintech firm, formerly known as Square, was firing 4,000 employees, or nearly half its workforce. Though Dorsey attributed the layoffs to pandemic overhiring, he also enthused that “intelligence tools” were creating a “new way of working” with smaller teams.
This sounded alarm bells across the industry, per a roundup of reactions by The Wall Street Journal. “Square is just the beginning,” former Meta and Salesforce executive Clara Shih wrote on X, responding to a lengthy post claiming that the Block layoffs are “the first AI cut.”
“A lot of the jobs that we’ve thrown human beings at the last 20 or 30 years, you won’t need as many human beings doing those same jobs,” Amazon CEO Andy Jassy said in a CNBC interview when asked about Dorsey’s cuts flagged by the WSJ.
The fears are warranted, but likely overstated at the present moment. There’s no denying that firms are laying off droves of employees, and there’s also no denying that many of them are openly enthusiastic about AI. One report found that AI was cited in the announcements of more than 54,000 layoffs last year. Those employers include Amazon, which is in the midst of culling 14,000 employees after boasting of the “efficiency gains” from deploying AI across the company.
But are autonomous systems actually replacing those jobs? Experts caution that executives may simply be using AI as an excuse to justify cuts that were driven by purely financial logic, a phenomenon that’s being dubbed “AI-washing.”
Marcelo P. Lima, founder and managing partner at Heller House, disputed alarmists claims that Dorsey’s cuts at Block were AI driven, calling them the “new Citrini fake narrative.”
“Everyone will assume Jack Dorsey… is doing this because of AI,” he wrote on X. “He’s not.”
The reality, Lima explained, was that the company was bloated in the first place. Like many tech companies during the pandemic, it had hired thousands of new employees, ballooning its workforce from 3,900 in 2019 to 12,500 in 2022.
There’s also little evidence that AI systems are currently capable of taking over human roles in any robust sense. Numerous studies have found 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 illustrated how AI can negatively impact human employees, dragging down efficiency and even intensifying work.
Still, the fear of something is often more damaging than the thing itself, and if the market is constantly rattled by AI’s still vague potential to disrupt if not upend the job market, it could cause economic uncertainty to fester for years to come.
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