AI Replaces 3,900 Jobs: Report by Challenger, Gray & Christmas

A new report mentions 3,900 job cuts owing to “AI” in May, corresponding to ~5% of all job cuts the very first time AI was included as a reason.

Challenger, Gray & Christmas is an outplacement firm in the US. Its recent report identifies “AI” as the reason for 3,900 job cuts. It’s more than outsourcing to another US company, bankruptcy, relocation, COVID-19, and supply shortage combined. This is not a survey of all US job cuts, and a large section of the respondents simply chose “no reason provided,” but it does give us an insight into what’s to come, according to many.

You can download the report below:

Job cuts, in general, are 20% higher in May vs. April and 287% higher than in May 2022. There’s a 315% yearly increase in job cuts.

Most notably, the technology sector has announced the most job cuts since 2001. Job cuts in the tech sector are up almost a whopping 3,000% over the same period last year, which was itself high on job cuts.

AI as a reason might amount to roughly 5% of the total job cuts in May, but it was also the first time ever that AI was listed as a contributing factor behind layoffs. Goldman Sachs has already warned that AI poses the risk of significant disruption in the labor market.

There have already been reports of The Washington Post laying off two copywriters, replacing their job with “cheaper and better” ChatGPT. CNET also laid off reporters in favor of using AI to write articles (that needed to be proofread for plagiarism later). These one-off cases cannot be taken at face value, as there could be any number of problems with the previous staff or writers, and ChatGPT just so happens to be an option today, but more and more news outlets are reporting how AI is snatching jobs and that points toward a pattern.

Writers, artists, researchers, and those involved in redundant tasks that AI can accomplish faster are currently the most at-risk.

By Abhimanyu

Unwrapping the fast-evolving AI popular culture.