Companies are blaming AI for job cuts. Critics say it’s an easy excuse

Across various sectors, including technology and airlines, major corporations are implementing significant workforce reductions, attributing these cuts to the rise of artificial intelligence. However, critics argue that many companies are leveraging AI as a convenient excuse for downsizing. Recently, Accenture, a leading tech consultancy, unveiled a restructuring initiative that allows for rapid layoffs of employees who aren't reskilling in AI. Shortly after, Lufthansa announced plans to cut 4,000 jobs by 2030 as it integrates AI for greater efficiency. Moreover, Salesforce recently eliminated 4,000 customer support positions, claiming that AI can handle half of the workload. In the fintech sector, Klarna has slashed its workforce by 40% while aggressively adopting AI tools. Even Duolingo is moving towards reducing its reliance on contractors in favor of AI solutions. Fabian Stephany, an assistant professor specializing in AI and work at the Oxford Internet Institute, suggests that the rationale behind these layoffs may extend beyond mere efficiency. He points out that companies are often using AI as a scapegoat for strategic decisions that include workforce reductions. "I'm skeptical that the layoffs we are witnessing are genuinely due to efficiency gains. It seems more like companies are using AI as a pretext," Stephany stated in a CNBC interview. This trend of blaming AI for layoffs has sparked debate online. Jean-Christophe Bouglé, a founder, expressed concern in a LinkedIn post, suggesting that the adoption of AI is happening at a much slower pace than indicated. He highlighted that many large corporations are rolling back AI initiatives due to cost and security issues, despite announcing layoffs tied to AI. Jasmine Escalera, a career expert, added that this narrative is fostering anxiety among employees, who fear job displacement due to AI. "Companies need to be more transparent about their AI strategies," Escalera told CNBC Make It, arguing that openness would alleviate some of the fears surrounding job security. In response to recent layoffs, Salesforce clarified that the deployment of its AI agent, Agentforce, has allowed for a reduction in customer support cases, which negated the need for certain roles. Klarna's CEO noted that the workforce reduction was also influenced by natural attrition and adjustments within their analytics team. While companies like Lufthansa and Accenture have refrained from commenting further on their AI strategies, a report from Yale University's Budget Lab revealed that AI has had minimal disruption on the U.S. labor market since ChatGPT's introduction in 2022. Their analysis showed that AI has not yet led to widespread job losses. Additionally, research from the New York Fed indicated that most firms are not using AI as a justification for layoffs, with only 1% of service firms citing AI as the reason for job cuts over the past six months. Stephany concluded that fears of mass unemployment due to AI are overstated, suggesting that history shows technology typically enhances productivity and creates new job opportunities rather than eliminating them. "Concerns about technology displacing human labor have been around for centuries, and yet, new jobs continue to emerge as a result of technological advancements," he remarked.