AI-driven job losses surge marking a disturbing trend

Source: Business Insider

Almost 4,000 people who were laid off in May lost their jobs because of artificial intelligence, and it's the first time AI has been listed in the monthly report from Challenger, Gray, and Christmas.

Some 3,900 of the over 80,000 job cuts that took place in May were attributed to AI, the report found. Other listed reasons that cost more jobs include things like market and economic conditions, cutting costs, restructuring, or mergers and acquisitions.

The firm found that between January and May, there were about 417,500 lost jobs, making it the worst five-month start to a year since 2020, when the onset of the pandemic led to more than 1.4 million layoffs. Outside of the pandemic, the start of 2023 has produced the worst layoff numbers since the 820,000 layoffs that took place to start in 2009, per the Challenger report.

A spokesperson confirmed to Insider that the May report is the first time AI has been included as a reason, and said the cuts all came from the tech sector, which is buzzing with the latest developments in AI tech from ChatGPT to new features announced seemingly every week from companies like Google, Adobe, and Amazon.

While Challenger expects the trend to continue, the spokesperson said some companies could be hesitant to reveal AI as a motivating factor for layoffs, and it's unclear how the number of jobs created by AI will compare to the number of jobs that are eliminated because of it.

Just last week, the largest eating disorder support nonprofit in the US, the National Eating Disorder Association confirmed to Insider's Britney Nguyen that it was replacing at least six helpline employees with an AI chatbot named Tessa it has been using since last year. However, the organization said Tuesday it was briefly shutting Tessa down. That came amid reports from one user that said Tessa provided advice like weighing yourself weekly and counting calories, ideas that the user said previously led her to develop an eating disorder, to begin with.

In May, a British telecommunications company announced in an earnings presentation plans to cut about 55,000 jobs by 2030, many of which were previously planned cuts that would come with finishing certain construction projects.

However, BT Group CEO Philip Jansen said the company will replace about 10,000 of those projected cuts over the next seven years with AI, as he said the company's existing chatbot "Amy" can already answer many user questions, and will only improve with time.