AI is already behind tens of thousands of layoffs, according to the companies that made them. The most well-known is that Block (NYSE: XYZ | XYZ Price Prediction) laid off 40% of its workforce in March. Oracle (NASDAQ: ORCL) fired 21,000 people earlier this year.
The layoffs were made in the name of AI, making their workforces more productive. However, skeptics said it was simply a matter of improving the bottom line. This was cynical and impossible to prove.
The Oracle and Block layoffs were part of what is supposed to be an AI Armageddon. This would spread from junior bankers who analyze bank deals to the people who handle checkout at Walmart (NYSE: WMT). The figure is supposed to eventually be in the millions. If so, it could drive US unemployment to double digits and damage the economy.
Finally, a company has said it will lay people off to return to its core business. Etsy (NASDAQ: ETSY) cut 12% of its workforce, which was 220 people. Most were in its product and engineering operations. It forcefully said AI was not a factor. It was just a simple way to make its business more focused. The cuts weren’t driven by cost-cutting initiatives or artificial intelligence, Chief Executive Kruti Goyal said in a message to Etsy’s workers. “Buyers are discovering products in new ways. Sellers have access to increasingly powerful tools to build their businesses. And the expectations they have of Etsy continue to rise.”
Etsy posted strong quarterly earnings when it made the worker announcement. Revenue rose 6% to $668 million from the same period the year before. EPS rose to $.98 from $.39. The numbers were from “continuing operations.” It had sold one of its divisions, which affected its figures.
Etsy’s announcement does not prove that AI will never affect job decisions. It does show, however, that sometimes a layoff is just a layoff because a company can make more sense of itself when it restructures.
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