It depends on how one defines a layoff. Microsoft Corp. (NASDAQ: MSFT) has done it in waves, a few thousand here and a few thousand there. When one was announced, CEO Satya Nadella said, “the job cuts illustrate the enigma of success in an industry that has no franchise value.” That was a vague description of artificial intelligence (AI).
The largest AI-related job cut at one time, research shows, is 11,000 people at Accenture PLC (NYSE: ACN). The company describes itself broadly as an expert in several industries. In reality, it is a management research firm like McKinsey, which has also started to lay off a portion of its staff (it laid off 5,000 people because of a slowdown in its business). Accenture also defines itself as forward-looking. And it competes with the strategic planning arms of former accounting firms Deloitte and PwC.
Accenture is big. It has 770,000 employees worldwide and says it has 9,000 clients in 190 countries. Wall Street does not like it, as its stock is down 33% this year. The broader market is up 14% over the same period. In its most recently reported quarter, per-share earnings fell from $2.89 the year before to $2.27. The company’s growth years appear to be behind it. The share price is up only 3% in the past five years, while the market is 91% higher.
Accenture appears to have cut people who cannot be “retrained” to use AI. Versions of ChatGPT, Claude, or Gemini will permanently replace some jobs.
The layoffs look something like those at Goldman Sachs. AI can perform some jobs at the investment bank better than people do.
The Jobs Lost to AI
Accenture is part of a wave in which executives comb through their employee rosters and look for jobs with the most functions that repeat themselves. Among these are positions in human resources departments. Another area is complex research that low-level but highly educated people often do. This includes junior investment bankers who spend 90 hours a week looking for patterns used in M&A and institutional investing. Some are straight out of top business schools and make low hundreds of thousands of dollars a year in the early parts of their careers.
Accenture is an example of the way AI can be trained to do even high-level analysis. It can rush through large amounts of data and look for patterns, and it can render “opinions” based on these patterns.
As AI receives more training and gains greater analytic prowess, the Accenture layoffs are likely just the start of a wave in the sector.
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