Uber (NASDAQ: UBER | UBER Price Prediction) laid off 10% of its customer service staff as part of what it said was an effort to “embrace artificial intelligence.” Megha Yethatika, Uber’s vice president of global community operations, commented, “Our organization has become too complex and siloed.”
The decision raises, once again, whether AI will cause huge numbers of layoffs across a number of industries, or whether similar announcements from other companies are isolated incidents of AI’s value in narrow parts of businesses.
Part of the panic about layoffs comes, to a large extent, because of highly visible AI downsizing. These include Block’s (NYSE: XYZ) decision to cut 40% of its entire workforce. This totaled 4,000 jobs. Jack Dorsey, CEO of Block, said smaller teams married with AI were extremely efficient.
The Block decision was followed quickly by 21,000 layoffs at Oracle (NASDAQ: ORCL). This was 13% of its 162,000 workers. Some outsiders were skeptical about the decision because Oracle’s expenses are viewed in light of its huge investments in AI, which have been a trigger for a sell-off in its shares. Amazon (NASDAQ: AMZN) and Meta (NASDAQ: META) have also downsized parts of their operations because of AI, according to their management.
The question about this growing number of job cuts is whether they are an early part of what will become an AI-created “unemployment apocalypse.” This would involve software engineers, people in entry-level jobs that involve data analysis and recommendations for the analysis. The data analyst challenge is based on whether AI is faster and more accurate at producing results. It could move across consulting and the financial services industry.
The largest number of AI-driven layoffs may eventually be among companies that have front-line workers. Many of these are retailers from McDonald’s to Walmart. Taken together across some of America’s largest employers, cuts could go, in aggregate, into the hundreds of thousands.
When the Titanic hit the iceberg that sank it, the first reaction was that it was “unsinkable.” Is Uber part of the tip of that iceberg or the 90% beneath the surface?
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