Sarah Ponczek and Luke Lloyd discuss their perspectives on technology and AI, the impact on air freight and shipping rates from Shein and Temu, and the Fed’s handling of rates.
Jobs in corporate America have been put at risk as the artificial intelligence revolution takes hold. Even senior executives and longtime executives have found themselves in a perilous situation as companies leverage technology to streamline operations and create more agile organizations.
But AI is not the only one to blame. Experts tell FOX Business that many job losses are also due to the difficult economic climate and companies trying to correct course after the hiring surge linked to the COVID-19 pandemic.
“Hiring was very high immediately after the pandemic, and some companies are now right-sizing their workforces,” Laura Ullrich, Indeed’s director of economic research for North America, told FOX Business.
Attendees at the Albany Career Fair in Latham, New York. (Angus Mordant/Bloomberg)
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Simultaneously, automation and AI are beginning to replace routine job tasks in fields such as media, software development, data analytics and marketing, which “effectively reduces the need for many white-collar workers,” Ullrich said.
The problem is compounded by slowing income growth in some sectors. In turn, Ullrich said, “employers are first eliminating white-collar positions, where productivity gains can be made without disrupting physical production or customer-facing operations.”
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Debra Andrews, founder of marketing company Marketri, told FOX Business the problem is that businesses are trying to balance two pressures at once.
“It’s about shareholder demands for efficiency and the growing belief that AI can achieve this instantly,” Andrews said.
A job seeker attends a veterans career and resources fair in Long Beach, California. (Eric Thayer/Bloomberg via Getty Images)
But this reality is not so acceptable. Ed Elson, a business analyst and co-host of the “Prof G Markets” podcast, argued that society is too obsessed with the optimism often associated with the long-term promises of artificial intelligence, which stands in stark contrast to the technology’s short-term reality.
“The conventional wisdom of AI is that in the long run it won’t take your job – that it will be so value-creating that it will make all of our lives better and more productive,” Elson said. “However, the short-term reality is now setting in. And the short-term reality is that AI will take your job.”
These layoffs, he said, “are proof of that.”
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Amazon announced this week that it would cut 14,000 jobs as part of an internal restructuring.
Shipping giant UPS revealed in a regulatory filing that it had laid off about 48,000 workers this year, just after Target announced it was cutting about 1,000 positions across the company and eliminating 800 vacant positions in an effort to accelerate business decision-making and drive growth under its new chief executive, Michael Fiddelke.
Nestlé, the world leader largest packaged food companyannounced in mid-October that it would reduce its workforce by 16,000 people over the next two years in a bid to “significantly” reduce costs under its new CEO, Philipp Navratil. Meanwhile, General Motors warned its staff as recently as this week that it would cut hundreds of positions indefinitely for the near future to adapt to slowing demand for electric vehicles.
Automation and AI are beginning to replace routine work tasks in businesses. (iStock)
This happens from small businesses to large corporations. Garrett White, entrepreneur and CEO of Wake Up Warrior, a privately held leadership and personal development company, told FOX Business he has already eliminated entire writing divisions and replaced about half of his coding team.
“AI is now showing the world that it’s possible to do more, more efficiently…by eliminating jobs that are no longer useful, like accounting,” White said. Although this reality is difficult to understand, the goal of a business is to produce profit.
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Elson said these layoffs show how the broader conversation needs to change.
“The lesson is that we should all spend less time philosophizing about how AI will change society in the long term, and more time understanding how it will change society in the short term,” Elson said. “Its short-term effects are clear: it decimates white-collar information work and reduces job entry opportunities for young people.”
