WASHINGTON — U.S. technology companies have eliminated nearly 140,000 jobs so far this year while simultaneously ramping up record spending on artificial intelligence, according to an analysis by the Financial Times.
The publication reported that the layoffs account for more than one-third of all announced job cuts in the United States this year, citing its review of corporate filings and data from executive outplacement firm Challenger, Gray and Christmas..
According to the report, nearly 50,000 of those job reductions came from Amazon, Oracle, Meta and Microsoft, representing about 6% of their combined corporate workforce. Those four companies, along with Alphabet, are projected to spend more than $800 billion on AI-related initiatives this year, the Financial Times reported.
The report said layoffs have become commonplace across Silicon Valley since the hiring surge that accompanied the COVID-19 pandemic subsided. Many technology companies have continued trimming staff even as they invest heavily in AI infrastructure and development.
Layoffs Across Broader Market
The trend contrasts with the broader U.S. labor market, where hiring has slowed from post-pandemic highs, but unemployment has remained relatively low at 4.2%, according to government data cited by the Financial Times.
The newspaper pointed to layoffs earlier this year at Block, where CEO Jack Dorsey said advances in AI were changing the company’s workforce needs.
Some labor economists, however, questioned whether AI is the primary driver of the reductions.
“The typical attitude of tech executives has been to say that AI allows us to gain efficiency rather than admit that they overhired,” Enrico Moretti, an economics professor at the University of California, Berkeley, told the Financial Times. “It’s an easy way out.”
Other research suggests companies making the largest investments in generative AI are continuing to expand their workforces.
Effect of Generative AI
A recent study by corporate card company Ramp and workforce analytics firm Revelio Labs found that organizations spending the most on generative AI increased headcount by 10.2% during the two years following adoption, with growth driven entirely by companies making the largest AI investments.
According to a report on the findings by PYMNTS, companies with lower levels of AI spending showed no statistically significant change in staffing during the same period. Among the high-intensity AI adopters, entry-level employment grew 12%.
The Financial Times also noted that some AI executives have moderated earlier warnings about widespread job displacement.
‘More Measured Outlook’
Anthropic CEO Dario Amodei, who last year warned AI could eliminate half of all entry-level jobs, has since adopted a more measured outlook. According to The Wall Street Journal, Amodei recently said companies can either use AI to accomplish the same amount of work with fewer resources, which can lead to layoffs, or use the technology to accomplish more while maintaining their workforce.
“They can do the same thing with less resources, and that leads to things like layoffs, or they can do more with the same amount of resources,” Amodei told the Journal. “But that requires creativity.”
