Companies keep slashing jobs. How worried should workers be about AI replacing them?

Yahoo

11 hours ago

Tech companies that are cutting jobs and leaning more on artificial intelligence are also disrupting themselves.
Amazon's Chief Executive Andy Jassy said last month that he expects the e-commerce giant will shrink its workforce as employees 'get efficiency gains from using AI extensively.'
At Salesforce, a software company that helps businesses manage customer relationships, Chief Executive Marc Benioff said last week that AI is already doing 30% to 50% of the company's work.
Other tech leaders have chimed in before. Earlier this year, Anthropic, an AI startup, flashed a big warning: AI could wipe out more than half of all entry-level white-collar jobs in the next one to five years.
Ready or not, AI is reshaping, displacing and creating new roles as technology's impact on the job market ripples across multiple sectors. The AI frenzy has fueled a lot of anxiety from workers who fear their jobs could be automated. Roughly half of U.S. workers are worried about how AI may be used in the workplace in the future and few think AI will lead to more job opportunities in the long run, according to a Pew Research Center report.
The heightened fear comes as major tech companies, such as Microsoft, Intel, Amazon and Meta cut workers, push for more efficiency and promote their AI tools. Tech companies have rolled out AI-powered features that can generate code, analyze data, develop apps and help complete other tedious tasks.
'AI isn't just taking jobs. It's really rewriting the rule book on what work even looks like right now,' said Robert Lucido, senior director of strategic advisory at Magnit, a company based in Folsom, Calif., that helps tech giants and other businesses manage contractors, freelancers and other contingent workers.
Exactly how big of a disruption AI will have on the job market is still being debated. Executives for OpenAI, the maker of popular chatbot ChatGPT, have pushed back against the prediction that a massive white-collar job bloodbath is coming.
'I do totally get not just the anxiety, but that there is going to be real pain here, in many cases,' said Sam Altman, chief executive of OpenAI, at an interview with "Hard Fork," the tech podcast from the New York Times. 'In many more cases, though, I think we will find that the world is significantly underemployed. The world wants way more code than can get written right now.'
As new economic policies, including those around tariffs, create more unease among businesses, companies are reining in costs while also being pickier about whom they hire.
'They're trying to find what we call the purple unicorns rather than someone that they can ramp up and train,' Lucido said.
Before the 2022 launch of ChatGPT — a chatbot that can generate text, images, code and more —tech companies were already using AI to curate posts, flag offensive content and power virtual assistants. But the popularity and apparent superpowers of ChatGPT set off a fierce competition among tech companies to release even more powerful generative AI tools. They're racing ahead, spending hundreds of billions of dollars on data centers, facilities that house computing equipment such as servers used to process the trove of information needed to train and maintain AI systems.
Economists and consultants have been trying to figure out how AI will affect engineers, lawyers, analysts and other professions. Some say the change won't happen as soon as some tech executives expect.
'There have been many claims about new technologies displacing jobs, and although such displacement has occurred in the past, it tends to take longer than technologists typically expect,' economists for the U.S. Bureau of Labor Statistics said in a February report.
AI can help develop, test and write code, provide financial advice and sift through legal documents. The bureau, though, still projects that employment of software developers, financial advisors, aerospace engineers and lawyers will grow faster than the average for all occupations from 2023 to 2033. Companies will still need software developers to build AI tools for businesses or maintain AI systems.
Tech executives have touted AI's ability to write code. Meta Chief Executive Mark Zuckerberg has said that he thinks AI will be able to write code like a mid-level engineer in 2025. And Microsoft Chief Executive Satya Nadella has said that as much as 30% of the company's code is written by AI.
Other roles could grow more slowly or shrink because of AI. The Bureau of Labor Statistics expects employment of paralegals and legal assistants to grow slower than the average for all occupations while roles for credit analysts, claims adjusters and insurance appraisers to decrease.
McKinsey Global Institute, the business and economics research arm of the global management consulting firm McKinsey & Co., predicts that by 2030 'activities that account for up to 30 percent of hours currently worked across the US economy could be automated.'
The institute expects that demand for science, technology, engineering and mathematics roles will grow in the United States and Europe but shrink for customer service and office support.
'A large part of that work involves skills, which are routine, predictable and can be easily done by machines,' said Anu Madgavkar, a partner with the McKinsey Global Institute.
Although generative AI fuels the potential for automation to eliminate jobs, AI can also enhance technical, creative, legal and business roles, the report said. There will be a lot of 'noise and volatility' in hiring data, Madgavkar said, but what will separate the 'winners and losers' is how people rethink their work flows and jobs themselves.
Tech companies have announced 74,716 cuts from January to May, up 35% from the same period last year, according to a report from Challenger, Gray & Christmas, a firm that offers job search and career transition coaching.
Read more: AI a job killer? In California it's complicated
Tech companies say they're slashing jobs for various reasons.
Autodesk, which makes software used by architects, designers and engineers, slashed 9% of its workforce, or 1,350 positions, this year. The San Francisco company cited geopolitical and macroeconomic factors along with its efforts to invest more heavily in AI as reasons for the cuts, according to a regulatory filing. Other companies such as Oakland fintech company Block, which slashed 8% of its workforce in March, told employees that the cuts were strategic not because they're 'replacing folks with AI.'
Diana Colella, executive vice president, entertainment and media solutions at Autodesk, said that it's scary when people don't know what their job will look like in a year. Still, she doesn't think AI will replace humans or creativity but rather act as an assistant.
Companies are looking for more AI expertise. Autodesk found that mentions of AI in U.S. job listings surged in 2025 and some of the fastest-growing roles include AI engineer, AI content creator and AI solutions architect. The company partnered with analytics firm GlobalData to examine nearly 3 million job postings over two years across industries such as architecture, engineering and entertainment.
Workers have adapted to technology before. When the job of a door-to-door encyclopedia salesman was disrupted because of the rise of online search, those workers pivoted to selling other products, Colella said.
'The skills are still key and important,' she said. 'They just might be used for a different product or a different service.'
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This story originally appeared in Los Angeles Times.