Microsoft CEO Satya Nadella (Photo by Justin Sullivan/Getty Images)
With the swift ascendancy of artificial intelligence, there is a looming fear that AI will replace jobs. Investment bank Goldman Sachs predicted in a 2023 report that the workforce in the United States and Europe would be upended, with 300 million jobs lost or diminished by this fast-growing technology.
In a recent survey conducted by ResumeBuilder, 37% of business leaders revealed they have already begun to replace staff with AI. Nearly half (44%) of the executive respondents stated they anticipate further jobs cuts in 2024 due to AI efficiency.
This year, a number of top companies have already enacted workforce reductions, while announcing plans to redirect their investments into generative AI and automation. The reallocation of resources to AI investments is a major way in which this emerging technology is impacting job security for white-collar professionals.
Companies Laying Off Making Substantial AI Investments
Amazon
Online retailer Amazon announced on Tuesday it will be culling “a few hundred roles” in its One Medical and Amazon Pharmacy units. The company has had a steady stream of layoffs in 2024 in other divisions, including Prime Video, MGM, Audible, Buy with Prime and Amazon Pay units.
In an internal memo from Amazon Health Services’ senior vice-president Neil Lindsay obtained by , Lindsay said that the company “identified areas where we can reposition resources” to make investments in “invention and experiences” that directly impact customers and members.
CEO Andy Jassy said last week in Amazon’s earnings call, “Gen AI is and will continue to be an area [of] pervasive focus and investment across Amazon primarily because there are few initiatives that give us the chance to reinvent so many of our customer experiences and processes.” Jassy projected that this technology will “drive tens of billions of dollars of revenue for Amazon over the next several years.”
Google recently laid off hundreds of employees across various functions, including its advertising, sales, engineering, hardware and Google Assistant teams. These job cuts were about “removing layers to simplify execution and drive velocity in some areas,” according to Alphabet CEO Sundar Pichai.
In January, Pichai warned his employees in an internal memo about the possibility of more “role eliminations” at the company in the coming months. “We have ambitious goals and will be investing in our big priorities this year,” he wrote in a message to Google staff that was obtained by the Verge. “The reality is that to create the capacity for this investment, we have to make tough choices.” Pichai told employees that “some teams will continue to make specific resource allocation decisions throughout the year where needed, and some roles may be impacted.”
In an earnings call last week, the chief executive said, “We continue to invest responsibly in our data centers and compute to support this new wave of growth in AI-powered services for us and for our customers. Through this, we are being disciplined in how we run the company. You’ve heard me talk about our efforts to durably reengineer our cost base and to improve our velocity and efficiency. That work continues. Teams are working to focus on key priorities and execute fast, removing layers and simplifying their organizational structures.”
He added, “Across different teams, we have wound down some non-priority projects, which will help us invest and operate well in our growth areas.”
Echoing Pichai’s sentiments, Alphabet CFO Ruth Porat said the company is moderating expense growth by exhibiting a “slower pace of hiring,” as she points to the “headcount down year-on-year.”
Microsoft
Last month, Microsoft eliminated 1,900 gaming roles, impacting about 8% of Activision Blizzard, Xbox and ZeniMax employees. In an internal memo to staff, Microsoft Gaming CEO Phil Spencer wrote, “As we move forward in 2024, the leadership of Microsoft Gaming and Activision Blizzard is committed to aligning on a strategy and an execution plan with a sustainable cost structure that will support the whole of our growing business.”
In addition to the company’s acquisition of Activision Blizzard, Microsoft has a substantial $13 billion investment and 49% stake in OpenAI, the company behind chatbot ChatGPT.
In his earnings call last week, Microsoft CEO Satya Nadella told investors, “We move from talking about AI to applying AI at scale. By infusing AI across every layer of our tech stack, we are winning new customers and helping drive new benefits and productivity gains.”
In talking about the future of work, Nadella said, “A growing body of evidence makes clear the role AI will play in transforming work. Our own research, as well as external studies, show as much as a 70% improvement in productivity using generative AI for specific work tasks.”
In scaling Microsoft’s AI and cloud investments, the company remains “focused on driving efficiencies across every layer of our tech stack and disciplined cost management across every team.”
When discussing how the organization is able to make margin improvements, Microsoft CFO Amy Hood told investors the company is “re-pivoting our workforce toward the AI-first work we’re doing, without adding material number of people to the workforce.”
