In 2023-2024 many big companies were laying off many employees. Google, one of the world's biggest companies, decided to suddenly lay off 12,000 Staff members, which is also one of the biggest layoffs in the company's history.
There are many reasons why big companies are not hiring anymore and have started to cut down on workers in recent years, here are some of the reasons:-
Economic Factor:
Anticipation of a recession: Due to high inflation, many companies are taking precautionary measures and reducing expenses in anticipation of a possible economic downturn.
Rising inflation: Increased costs of materials, labor, and other factors are putting pressure on companies' profits, leading some to cut costs through layoffs.
Changes in consumer behavior: Shifts in consumer spending habits or preferences can force companies to restructure their workforces to adapt.
Industry-specific factors:
Tech industry: The tech industry experienced a boom during the pandemic because many people were staying home and starting to consume more digital content, leading to rapid hiring. However, as growth slows, some companies are now laying off employees to adjust to the new reality.
Retail industry: The rise of online shopping has put pressure on traditional brick-and-mortar stores, leading to job losses in the retail sector. Due to the rise in online shopping, many local and physical stores are losing workers since items can be sold through online with a simple click.
Manufacturing industry: Increased automation and offshoring of jobs have also contributed to job losses in the manufacturing sector. Industrial parts can be manufactured in China for a cheaper price and in many other countries leading to job losses.
Company-specific factors:
Mergers and acquisitions: When companies merge or acquire other businesses, there can be redundancies in the workforce, leading to layoffs.
Restructuring: Companies may restructure their operations to become more efficient, which can sometimes involve layoffs.
Poor financial performance: If a company is struggling financially, it may be forced to lay off employees as a cost-saving measure.
Other factors:
The Great Resignation: The recent trend of workers voluntarily leaving their jobs has put pressure on companies to hire new employees, but it has also led some companies to re-evaluate their staffing needs and make cuts.
Automation: Advancements in technology are automating some jobs, which can lead to job displacement.
Evidence for AI causing job losses:
AI automates tasks: AI excels at handling repetitive, rule-based tasks, many of which were previously done by humans. This automation can make certain jobs obsolete.
Studies show potential displacement: Estimates vary, but research suggests AI could displace millions of jobs by 2030. For example, McKinsey & Company predicts 400-800 million jobs could be affected, while the Brookings Institution warns even college-graduate and professional roles are at risk.
Specific cases exist: Companies like British Telecom aim to replace thousands of staff with AI, and AI has been linked to job losses in sectors like manufacturing and transportation.
However, it's not a simple picture:
Job creation also occurs: While some jobs disappear, AI is also creating new ones, often requiring different skills in areas like AI development, data analysis, and human-computer interaction.
Job transformation likely: Instead of a complete replacement, AI might more often augment human workers, increasing efficiency and requiring adaptation rather than total job loss.
The impact varies across industries: The automation potential and job impact of AI differ significantly across industries, with blue-collar and middle-skilled jobs potentially more vulnerable.
Overall, the impact of AI on jobs is complex and multifaceted:
- Job losses are likely, but the extent and distribution are uncertain.
- New jobs will likely be created, but the transition for displaced workers can be challenging.
- Adaptation and reskilling will be crucial.
It's important to remember that technological change has always disrupted the job market, and AI is no exception.
