Amazon's announcement has sparked fresh panic in the tech sector. Earlier, online education company Chegg cut its workforce by 45 percent, citing the "new reality" of AI. Salesforce said it was laying off 4,000 employees and replacing them with AI-powered customer service agents. UPS also said it had cut 48,000 jobs in the past year.
But experts say AI is not the cause of all layoffs. “Everyone is so worried about AI now that when a company lays off employees, we assume it’s an AI effect,” says Martha Gimbel, executive director of Yale University’s Budget Lab. “But in reality, it’s often just a result of business restructuring.”
Economic analysts say that when interest rates in the United States were cut to near zero during the coronavirus pandemic, there was a massive hiring boom in the technology sector. Now, that excess workforce is being cut, which is largely part of the normal economic cycle.
A recent study found that since 2022, unemployment has also increased in occupations that have seen a high rate of AI use. However, Morgan Frank, a professor at the University of Pittsburgh, said, “Only administrative and office support workers have experienced unemployment since the introduction of ChatGPT. There has been no significant change in the case of tech professionals.”
But Amazon is still doing well. Its revenue in the second quarter of 2024 increased from the previous year to $167.7 billion.
Experts believe that large organizations like Amazon are both innovators and big users of AI technology, allowing them to easily automate some tasks.
Economists say it's still too early to say for sure whether AI has caused mass unemployment. But one thing is clear: the nature of jobs is changing. Some are losing their jobs, while others are finding new roles.
