Report reveals that AI has taken over 4000 jobs in May

US businesses laid off over 80,000 workers in May, which is a significant rise of 20% when considering the 66,995 job cuts in the previous month. Last year, in the same month, US employers laid off only 20,712 employees. These statistics come from a report published by Challenger, Gray & Christmas, Inc. on Thursday.

We are only a few months into 2023, and companies have already announced plans to lay off 417,500 employees. Within the same period in 2022, employers only announced 100,694 job cuts. This year’s value is a 315% increase when compared to the job cuts in 2022. This figure is the highest total number of job cuts we have seen January-May since 2020. In 2020, 1,414,828 people lost their jobs in the US within a similar period. Another time we witnessed such high layoffs was in 2009 when US employers laid off 822,282 workers from January through May.

The reasons for layoffs are varying. The market condition and restructuring are two factors that affected a lot of these layoffs. However, for the first time, we are seeing layoffs due to the advancement of AI, this year. Andrew Challenger of Challenger, Gray & Christmas, Inc., says that almost all the 4000 AI-related job cuts were in the tech sector. Challenger says that they believe AI will be the cause of many job losses and that even they are surprised at the speed at which AI became one of the reasons behind job cuts. The Challenger report does not mention the tech businesses that implemented the AI-related job cuts.

According to Andrew Challenger of Challenger, Gray & Christmas, Inc., consumer confidence has dropped to a six-month low and businesses are stalling their hiring in preparation for a potential slowdown.

It is easier to first name the few industries that have not been affected by these job cuts. Education, Government, Industrial Manufacturing, and Utilities are the few industries that do not seem affected by the rising layoffs. Other than these, every other industry has seen a sharp rise in layoffs in 2023. The tech sector contributes to the largest share of job cuts in May with 22,887, making its total 2023 layoffs rise up to 136,831.

While AI is stealing the jobs of certain workers, this technology is also creating more opportunities for others. JPMorgan advertised 3,651 jobs, all AI-related, from February through April, according to Bloomberg. However, a considerable sum of employers are not replacing workers with AI, but using the technology as a tool to lessen the burden on their employees.

A majority of Americans believe that their jobs will be taken over by AI one day. This sentiment is even higher among rank-and-file workers. However, those in management positions are less worried that AI will cost them their job. They believe that the technology will make their jobs easier.

Goldman Sachs predicted in March that 18% of work all over the globe can be automated. In the US and Europe, this amounts to a quarter of the tasks. White-collar jobs seem to be more at risk of AI automation. Financial work, computer work, administrative jobs, and legal jobs are more likely to be automated in the near future. But blue-collar jobs have a higher chance of prevailing because these jobs require physical labor.