Jobs can feel precarious right now as well-known companies keep slashing workers.
The latest is Meta, which promised it would cut jobs this month and on Wednesday sent layoff notices to about 10 percent of its staff, nearly 8,000 people, according to news reports.
Like some other technology companies, Meta has attributed the layoffs partly to the effects of artificial intelligence. They follow job cuts from Amazon, Wall Street banks, Oracle, Nike and UPS. Meta didn’t respond to a request for comment about the layoffs. (Jeff Bezos, Amazon’s executive chairman, owns The Washington Post.)
But headline-grabbing layoffs and corporate justifications can give a misleading impression about what ails America’s job market and AI’s role in that. It could lead people to misjudge their career prospects or financial risks.
The numbers show that layoffs in the U.S. are roughly at or below levels from before the pandemic, although they are higher than in 2022 when businesses snapped up workers as the economy roared back to life.
In the three months ended in March, an average of 1.75 million Americans were laid off each month, according to calculations of Bureau of Labor Statistics data. The average in March 2019 was 1.72 million.
A different measure that accounts for the growing U.S. workforce shows that layoffs affected about 1.2 percent of employed people in March, a number that has been steady for years outside of the pandemic.
That doesn’t make getting laid off any less stressful. There’s so little hiring that the 3 million Americans who voluntarily quit their jobs each month, people entering the workforce or those who are laid off face longer odds than they did a few years ago.
“Layoffs, broadly considered, are not a problem at all,” said Guy Berger, a senior fellow at the Burning Glass Institute, a nonprofit research organization focused on the labor market. “Hiring being weak, that’s the biggest problem.”
Americans’ views of the economy and their own job prospects risk being distorted by too much focus on the relatively small number of layoffs, economists and other experts say. People fearful of job cuts may pull back their spending or delay potentially fruitful transitions like moving to a place with more career opportunities.
Tell The Post how the job market is working for you
Contact reporter Shira Ovide at [email protected] or on Signal at ShiraOvide.70
In the technology industry, where Meta and other companies are regularly announcing job cuts, the layoff picture is complex.
There has been a marked increase in layoffs in recent months in what the Labor Department calls the information industry, which includes employment of software developers and other tech workers.
But Matthew Martin, senior U.S. economist at the research and consulting firm Oxford Economics, noted that hiring has also increased in that category, which includes media and entertainment. The combination of hiring minus layoffs in the information industry is effectively a wash, Martin said.
Layoffs at Big Tech companies like Meta and other high-profile employers don’t necessarily reflect what is happening in the country, Martin said, and draw far more attention than what may be slow and steady workforce growth. “There’s a lot more headlines about job cuts than there are [about] expansion plans by businesses,” he said.
In his view, technology companies may be pushing out some workers and replacing them with people who have different skills as they respond to the demands of AI.
It’s true that businesses in some industries are devoting enormous sums of money and attention to AI. It’s changing how some people work and a minority of American businesses are rolling out AI tools.
But it’s also become a trend for bosses to blame layoffs on the productive capabilities of AI and its ability to replace workers, even when job cuts may have little to do with the technology. Sam Altman, CEO of ChatGPT-maker OpenAI, has taken note of the pattern that he and others call “AI washing,” essentially a high-tech form of whitewashing. (The Post has a content partnership with OpenAI.)
“You know something is happening all the time when they have a word for it,” said Gautam Mukunda, who teaches leadership at the Yale School of Management.
Mukunda and other observers note that AI could be used by CEOs as a shareholder-friendly excuse for layoffs triggered by other factors, including overhiring by the tech industry during the pandemic.
Other high-profile companies, including Meta and Uber, have effectively said they’re spending so much money on AI that they need to cut back elsewhere, including by slashing staff or reducing planned hiring.
AI-related employment changes are tiny so far, said Nathan Goldschlag, director of research at the Economic Innovation Group, a Washington think tank. He pointed to a recently published analysis of Census Bureau surveys, which found more than 95 percent of businesses that use AI said it hasn’t changed their staff sizes — and AI-related employment increases were more common than decreases.
What economists call a “low-hire, low-fire” job market is rough for job seekers, acknowledged Jerome H. Powell, who is set to depart as chair of the Federal Reserve.
“The labor market is in balance,” Powell said at a news conference last month. “But it’s an unusual and uncomfortable kind of a balance where people who don’t have jobs will have a hard time breaking in.”
The post What layoffs hide about the real problem with the job market appeared first on Washington Post.
