Artificial intelligence is transforming the technology sector and causing substantial changes in employment. In 2024 alone, more than 100,000 jobs were cut in 380 companies. As AI technology advances, it has become a significant reason for reducing staff numbers at various tech firms. This blog covers the effects of AI-fueled layoffs and examines the difficulties and prospects they create within the industry. Ultimately, the growing prevalence of AI is altering the technological framework, forcing technology industry layoffs.
Key Takeaways
- Significant Layoffs in the Tech Industry:Â In 2024, over 100,000 tech jobs were cut across 380 companies. Major firms like Intuit, Dyson, Tesla, and SAP have all significantly reduced their workforces, driven largely by the push toward AI and automation.
- AI’s Role in Employment Shifts:Â AI advancements are a primary factor in layoffs as companies adapt to new technologies. While some roles are being eliminated, there is a trend toward hiring new employees with AI expertise to handle evolving job functions.
- Broad Impact Across Sectors: The effect of AI extends beyond tech companies to industries such as gaming and banking. For example, the video game industry has faced significant layoffs, and the banking sector is also at risk, with a high percentage of roles susceptible to automation.
- Potential and Limitations of AI: AI can replace certain job functions like data entry, customer support, and telemarketing. However, jobs requiring complex decision-making, creativity, or emotional intelligence, such as product managers and UX/UI designers, are less likely to be replaced by AI in the near future.
Surge in Technology Industry Layoffs Reflects Shift Toward AI and Automation
The tech industry has experienced a notable increase in job layoffs this year, with over 100,000 positions eliminated by mid-July, reaching approximately 106,000. Among the major layoffs, Intuit, known for products like QuickBooks and TurboTax, announced plans to dismiss 1,800 employees as it transitions to AI-focused operations and away from conventional methods. Intuit’s strategy is not to replace these roles with AI bots but rather to hire new staff proficient in AI technologies for roles in product development, engineering, and customer-facing positions such as marketing, sales, and customer success.
The 2024 Economic Report of the President indicates that up to 20% of the U.S. workforce could face a high risk of job displacement due to AI advancements.
Intuit’s layoffs were part of a broader trend last week, with Dyson cutting 1,000 jobs, a third of its workforce. Tesla reduced its staff by about 14,500 employees, or 10% of its total, while SAP let go of over 8,000 employees, around 7% of its workforce. On July 8, the board of directors at UiPath sanctioned a reduction in its global workforce by approximately 10%, which translates to 420 jobs. The company is also shifting its business strategy to emphasize generative AI more.
Earlier, on July 3, OpenText announced its decision to eliminate around 1,200 positions as part of its ongoing restructuring to prioritize AI. The company anticipates hiring about 800 new employees in the future, focusing on expanding its sales, professional services, and engineering departments.
Tech giants like Google and Microsoft have also conducted several year-round layoffs. Recently, ByteDance also reduced its workforce by approximately 450 positions in its Indonesian e-commerce division, following the integration of TikTok Shop with local competitor Tokopedia in January. Meta allegedly eliminates 250 and 300 vice president roles in a separate development, adding to a broader wave of job reductions it commenced last year and in 2022, totaling 21,000 positions. Other firms such as PayPal, Snap, and eBay have also implemented job cuts this year.
The video game industry has been particularly affected, with major layoffs at Electronic Arts, Activision, and Riot Games, contributing to the sector’s total of over 10,000 job cuts in 2024. Additionally, a study reveals that 54% of positions in the banking industry are highly susceptible to automation, with 12% potentially benefiting from advancements in artificial intelligence (AI).
In the first quarter of the year, the tech industry saw over 57,000 layoffs, with an additional 41,000+ job cuts occurring in the second quarter. This brings the total for the year’s first half to a figure less than the 200,000+ job cuts during the same period in 2023, indicating a reduction in layoffs.
Overall, US businesses declared 322,043 layoffs from January to April, a decrease of 4.6% from the 337,411 layoffs reported in the corresponding months of the previous year.
Jobs AI Can Potentially Replace
Artificial Intelligence is making significant strides in automating various job roles, particularly in the tech industry. Here’s a look at some of the tech jobs that AI can potentially replace:
- Data Entry: AI tools efficiently handle large datasets, making data entry one of the first tech roles at risk. Automated systems can process data faster and with fewer errors than humans, reducing the need for manual data entry jobs.
- Customer Support Representatives: AI-powered chatbots and virtual assistants can manage routine customer inquiries, allowing human representatives to focus on more complex issues. This shift can significantly reduce the number of entry-level customer support roles.
- Telemarketers: AI-driven systems can perform telemarketing tasks more efficiently by handling calls and responding to customer queries without fatigue, which poses a risk to jobs in telemarketing and sales.
- Copywriting and Content Production: AI tools like ChatGPT can generate written content quickly and efficiently. While AI-generated content still requires human oversight for quality and creativity, many basic writing tasks can be automated.
- Graphic Design: AI platforms like DALL-E can create images and designs, challenging traditional graphic design roles. While these tools currently complement rather than replace designers, rapid advancements could see more significant impacts soon
- Financial Analysts and Accountants: AI’s ability to analyze financial data and detect patterns can replace many routine tasks performed by financial analysts and accountants. AI can predict market trends, perform audits, and handle bookkeeping more efficiently than humans.
Despite the advancements in AI, there are still many roles that it is unlikely to replace soon, especially those requiring human interaction, emotional intelligence, and complex decision-making, such as Product Managers, Data Scientists, AI Trainers and Annotators, Tech Support Specialists, Software Developers (with specialized skills), UX/UI Designers, Innovation and R&D Specialists, and System Architects, among many others.
Conclusion
The tech industry is undergoing a significant transformation driven by advancements in artificial intelligence. With over 100,000 job cuts in 2024, AI is reshaping job roles and workforce structures across various sectors. While many traditional positions are being eliminated, there is a shift toward hiring individuals with AI skills to manage and develop new technologies. This trend is affecting not only tech companies but also industries like gaming and banking, where automation threatens many jobs.
Despite the challenges, AI also presents opportunities for growth and innovation, particularly in roles that demand creativity and complex problem-solving. As companies adapt to these changes, the impact of AI on employment will continue to evolve, highlighting the need for both workforce adaptation and strategic planning in the face of technological progress.
