Artificial Intelligence (AI) has been identified as the reason for approximately 4,000 job losses in May this year, according to a monthly report released by the multinational HR company, Challenger, Gray & Christmas. This figure accounts for around 4.9 per cent of the total job cuts reported for the month. These job losses are across sectors. IBM CEO Arvind Krishna had said in an interview that his company would be replacing 6,800 jobs by AI in a phased manner over time. CBS News reported that two copywriters lost their jobs as employers sought the cost-effective alternative of utilising AI, while media company CNET laid off reporters while implementing AI to generate articles.
From January to May, a staggering 417,500 jobs were lost, making it the worst five-month period since 2020, when the COVID-19 pandemic prompted over 1.4 million layoffs. Even excluding the pandemic's impact, the report noted that the start of 2023 has seen the highest number of layoffs since the recession of 2009, which witnessed approximately 820,000 job cuts.
Senior Vice President of Challenger, Gray & Christmas, Andrew Challenger, acknowledged the concerning trend, stating, "Consumer confidence is down to a six-month low, and job openings are stagnating. Companies seem to be scaling back on hiring in anticipation of an economic slowdown."
In addition to AI, the report highlighted business closures as the leading cause for layoffs in May, resulting in 19,600 job losses. Following closely behind were "market/economic conditions," which accounted for around 14,600 layoffs, and "no reason provided" with 12,900 job cuts. Throughout the first five months of 2023, adverse economic conditions were cited as the primary cause for nearly 206,300 announced job cuts.
This growing reliance on AI has raised concerns about the future of employment. In March, investment bank Goldman Sachs released a report predicting that AI could potentially displace 300 million full-time jobs worldwide, affecting nearly one-fifth of the global workforce.