Is A.I. Replacing Tech Workers or Providing an Excuse for Job Cuts?
Tech industry layoffs are accelerating, and executives have been quick to say it’s because their companies are doing more with artificial intelligence, even when there may be more to it.
Meta, Coinbase and Block have each laid off at least 10 percent of their employees in recent months and partly blamed artificial intelligence. About 13,000 jobs were eliminated among the three companies.
But the cuts also came after big changes and growing questions about their businesses. Meta backed away from its big bet on the so-called metaverse, which cost the company about $80 billion. Coinbase’s chief executive, Brian Armstrong, said that its business remained volatile and that there was “a down market” for cryptocurrency. And Block’s top executive, Jack Dorsey, acknowledged that the company had grown too much during the pandemic, tripling its work force from 2019 to 2022.
Layoffs in the tech industry are accelerating, whatever the motivations of executives. So far this year, more than 150 technology companies have cut a total of at least 115,000 employees, according to Layoffs.fyi, which tracks job cuts in the industry.
That drip-drip of layoffs has become a steady stream in recent weeks. Companies slashing their staffs have run the gamut from software providers like Atlassian and Autodesk, to social networking apps like Pinterest and LinkedIn, to financial technology companies like Intuit and PayPal.
But in more than a few cases, the recent layoffs have coincided with other business issues. Wall Street loves an A.I. story right now. That, analysts and economists say, has offered a smoke screen for companies looking to beef up profits or patch over old mistakes.
Cutting jobs to make way for A.I. is “a nice excuse, but some of these aren’t necessarily the best, most well-run companies,” said Mark Mahaney, an analyst at the investment bank Evercore. “They may have overhired, or they may be losing market share. There may be other issues.”
