Is AI Responsible for Job Cuts - Or Just a Good Excuse? (cnbc.com)
- Reference: 0179877232
- News link: https://it.slashdot.org/story/25/10/26/1535221/is-ai-responsible-for-job-cuts---or-just-a-good-excuse
- Source link: https://www.cnbc.com/2025/10/19/firms-are-blaming-ai-for-job-cuts-critics-say-its-a-good-excuse.html
> Fabian Stephany, assistant professor of AI and work at the Oxford Internet Institute, said there might be more to job cuts than meets the eye. Previously there may have been some stigma attached to using AI, but now companies are "scapegoating" the technology to take the fall for challenging business moves such as layoffs. "I'm really skeptical whether the layoffs that we see currently are really due to true efficiency gains. It's rather really a projection into AI in the sense of 'We can use AI to make good excuses,'" Stephany said in an interview with CNBC. Companies can essentially position themselves at the frontier of AI technology to appear innovative and competitive, and simultaneously conceal the real reasons for layoffs, according to Stephany... Some companies that flourished during the pandemic "significantly overhired" and the recent layoffs might just be a "market clearance...."
>
> One founder, Jean-Christophe Bouglé even said in [2]a popular LinkedIn post that AI adoption is at a "much slower pace" than is being claimed and in large corporations "there's not much happening" with AI projects even being rolled back due to cost or security concerns. "At the same time there are announcements of big layoff plans 'because of AI.' It looks like a big excuse, in a context where the economy in many countries is slowing down..."
>
> The Budget Lab, a non-partisan policy research center at Yale University, released [3]a report on Wednesday which showed that U.S. labor has actually been little disrupted by AI automation since the release of ChatGPT in 2022... Additionally, New York Fed economists released research in early September which showed that AI use amongst firms "do not point to significant reductions in employment" across the services and manufacturing industry in the New York-Northern New Jersey region.
[1] https://www.cnbc.com/2025/10/19/firms-are-blaming-ai-for-job-cuts-critics-say-its-a-good-excuse.html
[2] https://www.linkedin.com/posts/jeanchristophebougle_is-ai-the-biggest-excuse-ever-for-large-corporate-activity-7379793439753760768--2WJ?utm_source=share&utm_medium=member_desktop&rcm=ACoAACdGTRUBsbnEwmIC4xyi31AUL8KI7DRHNoY
[3] https://budgetlab.yale.edu/research/evaluating-impact-ai-labor-market-current-state-affairs
Glad the article mentioned overhiring (Score:2)
I seem to recall big companies hiring and paying engineers to ride the bench 3 or 4 years ago.
Re: (Score:2)
I was on the bench at WIPRO for almost a year. It was a pretty sweet gig. Full pay, no work. Eventually they cut me loose though.
What do you mean "or"? (Score:2)
In some cases it's one thing, in some cases it's the other, in some it's even both — someone is looting a company and the people they're replacing are crucial. They can claim they were suckered in by AI companies' promises.
Re: (Score:2)
I agree with you and I want to add some examples.
Here is a story from 2016 how a cucumber farmer automated cucumber sorting with AI. I want to mention this, because many think that only LLMs are AI, but there are much simpler implementations of AI also that replace tasks and those have been around for a long time. Replaced tasks mean less need for workers:
[1]https://cloud.google.com/blog/... [google.com]
Bigger example would be Amazon. If Amazon didn't have robots and AI doing work in their warehouses, they would have to em
[1] https://cloud.google.com/blog/products/ai-machine-learning/how-a-japanese-cucumber-farmer-is-using-deep-learning-and-tensorflow
Thinning the herd (Score:2)
At least in my direct experinece, I've not been surprised by any of the cuts made that I see. AI is a likely excuse, but you'll find direct attribution from official sources scarce.
Most of these cuts are performance based. Companies are getting lean, and if you're not going to lean in or are in core business adjacent roles, you're on the block.
Both (Score:5, Interesting)
It is absolutely being used as an excuse so that Wall Street doesn't slash valuations during mass layoffs.
At the same time large swaths of customer service reps are being replaced. The quality of the customer service doesn't matter because there has been so much market consolidation and there is so little competition left that you can't really go somewhere else because of bad customer service. Wherever you go it's owned by the same people and they're doing the same things.
So Salesforce firing 4000 customer service reps to replace them with chatbots is real.
On the other hand the company that makes my antihistamine drug fired all there sales reps which is made it stupidly difficult to get my drug because those sales reps did a lot of leg work for the doctors that isn't getting done. Those layoffs are real and very stupid and shortsighted.
Re: (Score:2)
> At the same time large swaths of customer service reps are being replaced. The quality of the customer service doesn't matter
The quality never mattered. That is why they are being replaced.
Put Competition back in the market (Score:2)
And you and bet your ass it will matter. If I call my discover card customer support I get a human being and an American at that. That's because they are trying to compete with visa and MasterCard so they are spending some extra money to boost the quality of their products.
And that's with just four players left in the market. Imagine if they were five or 10 or 15? There used to be dozens of small credit cards out there.
And that's just credit cards consolidation has hit literally everything.
Your
Re: (Score:2)
> Your life is worse than it was 20 years ago not because of some blue haired community college professor that won't let you say the n word. It's because billionaires took 50 trillion dollars out of the economy while you were worrying about blue haired Community College professors.
Actually life is pretty good here. I don't like the direction society is going but it won't be my problem so I don't care. Billionaires are lucky they can firewall themselves from the stupidity of the masses. I don't think a world run by average people would be better.
AI (Score:1)
Is a big factor in this, But rising costs are also a factor. In fact it's probably 50/50 between them. Neither of those things are good however, In any context.
Re:AI (Score:5, Insightful)
Of course they're blaming AI for headcount cuts now... the "COVID excuse" ran out by mid 2021, and the "inflation excuse" became stale by 2024.
I guess that you could use the "tariff excuse", but then you risk offending Trump supporters. So... AI it is!
Re: (Score:2)
Skilled jobs (engineers for example) being replaced by AI will be filled with warm bodies again, but in lower cost centres of excellence such as Romania, India, China.
The work from home experience has shown that it's perfectly reasonable to have teams spread over different time zones due to tools like MS Teams that make collaboration easy.
I'd not want the project manager role, though, with conf. calls at 5AM and 8PM...
On the contrary (Score:2)
It is one very bad excuse.
Ask the Leftovers. (Score:2)
I’d say the answer lies in those left behind still doing the very-much-still human jobs that require more than a ToddlerAI touch. Are they cruising along just fine without their human co-workers lost to typhoon RIF and hurricane Headcount? Today’s Human Stress index reading Fully Medicated, says hell no.
Are we seeing stock-padding whispershit talk in America like 996 schedules? The Seasoned Slack Picker Uppers getting screwed out of life itself working sloppy second and third shifts barely aw
Good excuse (Score:2)
I have heard several claims that the only real jobs the AI can cut are Middle Management jobs. AI is supposedly really good 95% of the time for their work, and the 5% of time they get it wrong, good Upper Management can stop the problem before it gets too big.
Some people say it can also do it for upper management with the CEO acting as the break. But no one seriously thinks upper management is going to replace themselves.
Current AI is not ready... (Score:5, Insightful)
...to do all of the things that the hypemongers predict.
Expert workers selectively use AI tools where they are genuinely helpful.
Clueless noobs believe the fiction that they can "vibe code" their way to riches.
Clueless executives believe the hype pitched by lying salesweasels and pay way too much for immature tech that fails to work as promised.
Add to that the overall economic chaos and it's not surprising to see the results.
It's complicated
Law of clickbait headlines, paragraph 2 (Score:2)
When question includes multiple variables and suggests that they're mutually exclusive when they're not, the answer is "yes, all of the variables".
Natural selection (Score:1)
I think most of the jobs being cut or at risk are those "low added value" coders that needed spoon feeding even after years. When someone needed fully fledged specs and coding directions to do anything, well that's exactly what an AI does, and much faster. If you work at a place where you are still only getting one-liners and have to hunt left and right for anything, you're safe lol
Everyone who uses AI knows its an excuse (Score:5, Interesting)
If you use AI, you know it's not useful enough to replace a human being yet and there's honestly no trending indicating it every will be. We saw a shift from an employee's market to an employer's market. We've had a very long shortage of good engineers and that shortage diminished. If you're a CEO, you can frame it one of 2 ways:
1. We overhired in the past and overestimated the demand for our product and we're cutting staff to ensure we remain solvent for upcoming economic headwinds (like tariffs and visa upheaval)
2. We're going AI, baby! We don't need as many humans!!!...because our investments in AI TOTALLY payed off and are legit and can help YOU cut staff too!!!!
No (Score:2)
Job cuts are the responsibility of the decision-makers who decide to make those job cuts, not some piece of technology being used by the company.
Assigning responsibility to AI is no different than assigning responsibility to hard drives.
If AI could replace tech jobs wholesale... (Score:3)
It seems like we'd be seeing lots of startups with only one or two employees (CEO / CFO), with an AI workforce - which doesn't seem to be the case.
We DO hear about a lot of "AI" startups, but they boil down to marketing - selling repackaged / customized versions of ChatGPT and the like.
Re: (Score:2)
Interestingly, if AI lived up to the hype, those startups we don't see would staff their CEO / CFO with AI first. If you had limited "super-human intelligence" wouldn't you want to apply it to the post important decisions of a startup first?
Meanwhile, all we really see being replaced by AI is propaganda generation. Society is evolving to be non-merit-based, the best liar wins. The best liars will be AI-assisted, the best truth-tellers won't be.
AI was responsible for the cuts, because ... (Score:2)
AI was largely responsible for the job cuts, because it gave companies a good excuse to cut their belly flab and make them appear like they were at the cutting edge of AI, giving their stock prices a big boost and a great quarterly bonus to their executives.
Give it time (Score:1)
Horse breeders didn't vanish the moment the model T was put on the market. Horse breeding peaked 7 years after the model T was launched. The web took about 5 years to hit 100 million users after Netscape Navigator 1.0. In contrast, ChatGPT had 100 million users in 2 months, easily an all-time record. It's a revolution, and yes, its going to take all the jobs. Get over it.
it's a false choice. (Score:2)
AI is clearly not responsible for job cuts, and it is a good excuse. But corporations don't need proven AI before making job cuts, Progandize CEOs, get them to fire their work force, then they will buy your AI garbage regardless of what it does. It's one more outsourcing move, the value is never proven beforehand.
Using AI at work (Score:2)
My employers recently signed up for a ChatGPT account and I've been seeing how it can help me.
I remain responsible for the big picture, for actually making apps that work on iOS and Android. I've found ChatGPT helpful for refining details. It saves sifting through years worth of Stack Overflow postings. It's a handy tool, but it won't replace me any time soon.
If you say "Chat GPT" in French it sounds like "chat j'ai pété" ("cat I farted"). I guess I need to get out more...
...laura
On the other hand ... (Score:2)
... if the companies have been wanting to do it, and if they economically can do it, then whether they have a useful PR "excuse" or not, it's still going to happen.
workweek over the past 150 years (Score:2, Interesting)
[1]https://www.scry.llc/2024/12/2... [scry.llc]
it's very likely that we'll see a substantial reduction in the standard workweek.
[1] https://www.scry.llc/2024/12/27/work-week/
Re: (Score:3)
Some see their work weeks cut to zero hours. I think that's they are calling "job loss".
No they can't - they needed an excuse (Score:5, Interesting)
> ... if the companies have been wanting to do it, and if they economically can do it, then whether they have a useful PR "excuse" or not, it's still going to happen.
So long as FAANG perceived that their success was based on eternal growth and attracting the best talent money can buy, they couldn't do layoffs. Layoffs are for old tech companies like IBM and Oracle. We're cool...we're hip...we give free lunches and have nap pods in our office and silly, crazy perks those "old" companies would never do...we're cool!!!...join our club...if you don't, you're just a loser, like all those IBM-ers.
Their real fear is they'd miss the AI or whatever future hype bubble because all the cool kids would go to a competitor that doesn't downsize. If the employer is the buyer, we're seeing a shift from a seller's market to a buyer's market. This is both due to interest rate hikes and 2 decades of largely unchecked growth at these behemoths...Facebook has all the engineers they need to run their shitty sites...same with Google. Prior to the rate hike, they had all they needed, but didn't want to lose top talent to their competitors. Elon did a reckless bloodbath at Twitter a year or 2 earlier and survived, so they colluded and layed off massive amounts of dead weight at the same time.
The most charitable narrative for AI is that they're hoping future AI will increase productivity enough that their existing staff would be able to add workload instead of adding headcount. Everyone who has used these AI tools knows it doesn't actually increase productivity tangibly enough to change your staffing.
Re: (Score:2)
> Layoffs are for old tech companies like IBM and Oracle.
Not for IBM, at least until a few decades ago. You could get fired for cause, but layoffs were unheard of. Things did change in the 90s though.
Re: (Score:3)
As regards IBM it was earlier than that, though they disguised it a bit. The first layoffs were actually some people at an IBM printer factory in Lexington, Kentucky. Hence Lexmark printers. Must have been around 1983? Major discussion topic during one of my early stints at the big blue place... It wasn't the first time IBM had sold (or shut down) a factory (or office), but it was the first time when the IBM employees were not given any option to remain with the company. Not that those options were always a
Re: (Score:2)
IBM transitioned most of their workforce to "low cost geographies", mainly India. As of last year IBM employed about 270,300 people globally. Only about 50,000 were working in the United States.
IBM has been a legacy company for 30 years (Score:2)
>> Layoffs are for old tech companies like IBM and Oracle.
> Not for IBM, at least until a few decades ago. You could get fired for cause, but layoffs were unheard of. Things did change in the 90s though.
Since the late 90s when I started my career, IBM was famous for Layoffs and just most of the world not knowing what they did. Like I've heard of DB2 and WebSphere...never actually seen them used anywhere I've been. EVERYONE was on a competitor to IBM: either open source or Oracle or MS...but never IBM. We know about mainframes and stuff...but no, during entire modern software era...let's say since the introduction of the smartphone, IBM has had lots of layoffs and if they have had success, it's been well