The prediction that artificial intelligence (AI) will replace human jobs is no longer a futuristic discussion. Chief Executive Officers (CEOs) of major corporations in the United States are warning of unemployment risks in competitive terms, and big tech companies have already begun actual layoffs. Beyond mere concerns, the reorganization of employment due to AI is evolving into a competitive landscape among corporations to see ‘who will cut jobs first and the most.’ The numerous alarming statements and actual layoffs recently made in the U.S. indicate that AI-based automation is signaling not just a technological advancement but a structural employment shock.
◇ “AI will eliminate half of jobs”… layoffs are already a reality
At the center of the controversy is Dario Amodei, CEO of the AI startup Anthropic. Last month, he stated, “Within 1 to 5 years, half of the entry-level office jobs in the U.S. could disappear, and the unemployment rate might soar to 20%.” He added, “We must stop glamorizing reality and face the employment shock head-on.” Following his remarks, even corporate executives who had previously been cautious about employment issues have begun to share similar warnings in public settings, diving into the competitive landscape of layoffs in the AI era.
Notably, Jim Farley, CEO of Ford, warned at last month’s Aspen Ideas Festival in the U.S., saying, “AI will literally replace half of the office jobs in America,” and added, “Many white-collar workers could be left behind.” Marianne Lake, CEO of JPMorgan Consumer & Community Banking, also stated at the annual investor event in May, “With the introduction of AI tools, the number of operational sector employees will decrease by 10% in the coming years.” Andy Jassy, CEO of Amazon, suggested in a memo last month that “a once-in-a-lifetime technological innovation could reduce the entire workforce,” indicating the possibility of layoffs. James Reinhart, CEO of the clothing e-commerce platform ThredUp, similarly expressed concerns at an industry conference in May, saying, “AI will destroy far more jobs than the public anticipates.” Thus, job reductions are no longer seen as ‘a future possibility’ but have been publicized as ‘realistic risks’ that corporate executives are openly discussing.
What had been predictions about layoffs is now translating into actual actions, and the pace is accelerating. On February 2, Microsoft (MS) announced it would lay off about 9,000 employees, which is roughly 4% of its global workforce. This follows a previous restructuring in May that affected over 6,000 employees and marks the second major layoff this year. This includes a comprehensive cut not only in specific sectors like gaming and entertainment but also at headquarters near Washington State and overseas branches. MS stated, “We are pushing for efficiency in response to rapidly changing market conditions.” Recently, it has revealed plans to invest $80 billion (approximately 109 trillion won) in building AI data centers for the fiscal year 2025, leading to interpretations that it is a strategy to reduce labor costs in order to expand AI investments.
As CEO Andy Jassy pointed out, Amazon is following the same trend. The company is particularly expanding AI automation in logistics, inventory forecasting, and demand analysis, while also forecasting a reduction in the size of its office staff. Currently, of Amazon’s total workforce, which numbers 1.56 million, about 350,000 are office workers, and large-scale restructuring affecting them has been indicated.
According to HR consulting firm Challenger, Gray & Christmas, the scale of layoffs in U.S. tech companies from January to May this year reached 74,700, a 35% increase compared to the previous year. A recent survey by job site Adzuna, cited by the British media Independent, found that there has been a 31.9% decrease in entry-level jobs that do not require degrees, among positions such as graduates, interns, and trainees, after the launch of ChatGPT in November 2022.
◇ The era of unemployment warnings appealing to investors
This atmosphere reflects a transition from a cautious position to an ‘outright warning of unemployment.’ Managers in Silicon Valley, who have long emphasized the efficiency of AI and technological optimism, are now beginning to acknowledge that AI is actually reducing jobs. The U.S. e-commerce company Shopify has issued guidelines requiring new hires to specify ‘why tasks cannot be replaced by AI,’ while language learning service provider Duolingo has stopped hiring contract employees for tasks that can be replaced by AI. Global pharmaceutical company Moderna has issued internal instructions to complete new product launches without increasing staff.
AI is no longer just ‘a tool to assist with work.’ CEOs are openly mentioning layoffs enabled by AI, and such corporations are receiving higher evaluations from investors.
Of course, not all corporations share the same stance. In particular, major generative AI service companies are distancing themselves from the excessive sense of crisis that is spreading. Brad Lightcap, COO of OpenAI, remarked during the ‘Hard Fork’ podcast on the New York Times on the 26th of last month that “there is still no clear evidence that AI is replacing entry-level jobs,” asserting that some of the threats have been exaggerated. Arvind Krishna, CEO of IBM, stated in an interview with the Wall Street Journal in May that while hundreds of HR positions have been replaced by AI, hiring for core roles in programming and sales has actually increased. Demis Hassabis, CEO of Google DeepMind, expressed concern about the loss of control over AI rather than job losses during an interview at London’s SXSW in June, warning against excessive fear.
Nevertheless, the fact that even traditional corporations are warning of the AI unemployment crisis indicates that the market is reacting uneasily. Investment bank Goldman Sachs analyzed that AI could replace 25% of jobs across all industries. AI, which was previously expected to impact only simple repetitive tasks, is now penetrating into office jobs, planning, marketing, and ‘cognitive-based labor,’ shaking the very employment landscape.