The AI Shift: How Big Tech’s Pivot to Artificial Intelligence Is Reshaping the Workforce

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On June 3, Aaron Damigos received a foreboding and all-too-familiar calendar notification for a business update meeting. This meeting, which involved a representative from HR, his supervisor, and higher-level executives, abruptly concluded his role as a web support associate at Microsoft.

In early June, it was reported that Microsoft had dismissed around 1,000 employees, with cuts affecting its mixed reality and Azure cloud sectors, as well as the consumer sales department led by Damigos. A leaked email to staff from Jason Zander, who holds the position of executive vice president of strategic missions and technologies at Microsoft, shared with Business Insider, cited a strategic shift towards artificial intelligence investment as the reason: “As a corporation, our primary objective is to lead in the artificial intelligence arena and to support all our clients in embracing this game-changing technology. In pursuit of this goal, we occasionally have to make choices that are in line with our forward-looking vision and strategy, while also ensuring Microsoft's continued growth and sustainability.”

Damigos, residing in Tacoma, Washington, mentioned that he was not explicitly informed that the pivot towards AI was the direct cause of his employment termination. His role focused on assisting clients in navigating Microsoft's offerings. However, it's evident that Microsoft, the primary supporter of OpenAI, is heavily invested in this technology. "The move towards AI seems to have unfortunately resulted in the sidelining of vital roles that are customer-oriented," Damigos shared. He has been documenting his experience of being laid off and promoting his capabilities on TikTok. "My job was to help customers effectively comprehend and utilize the products," he stated. He believed his team had significant potential to enhance the customer service experience at Microsoft, yet the company chose to allocate its resources differently.

Microsoft did not verify whether Zander's emails were genuine. "Making changes to our organization and staff is an essential and routine aspect of running our business," states Craig Cincotta, a representative for Microsoft. "We remain committed to focusing on and investing in key areas of growth that will shape our future and benefit our customers and partners."

The long-term effects of artificial intelligence (AI) on employment remain uncertain, but there's a common consensus among specialists that AI isn't likely to supplant the majority of employees in the near future. According to Nick Bunker, who leads economic research at Indeed, a prominent job site, "AI will transform the job market, though the specifics of this transformation are yet to be determined." While some forecasts suggest AI could lead to the creation of new job opportunities, there are instances where employees are currently training AI systems that could potentially replace them. However, the recent wave of job cuts indicates that it's not the advanced AI technologies themselves causing job losses, but rather the prevailing overenthusiasm surrounding AI.

Microsoft is not the only company making cuts. In April 2023, Dropbox revealed it would be letting go of 500 employees, with CEO Drew Houston citing AI's influence on this decision. "Ideally, we would reassign staff members to different teams, and we've made such moves when feasible," Houston explained. "But our future growth demands a varied combination of expertise, especially in AI and the development of new products."

Meta's CEO, Mark Zuckerberg, also spoke about reducing the workforce to focus on AI investments earlier this year. In a February post, he mentioned, "A key objective is to develop the top AI products and services," as Meta concluded its "year of efficiency" that led to the company becoming smaller.

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Google has also been channeling funds into its Anthropic AI projects, with its CEO, Sindar Pichai, highlighting ongoing reductions throughout 2024 starting from January, despite the company experiencing strong growth. "Our investment in the company's core priorities and future possibilities is carried out with a sense of responsibility," comments Bailey Tomson, a representative for Google. In the years 2023 and 2024, various teams at Google have "adjusted to enhance efficiency and improve collaboration," according to Tomson. "By doing so, we're streamlining our organizational structure, which allows our staff greater chances to contribute to our most groundbreaking projects and top priorities of the company, simultaneously cutting down on unnecessary bureaucracy and hierarchical levels."

The trend of focusing on artificial intelligence (AI) by tech companies is reminiscent of previous strategies such as outsourcing, which resulted in subpar working conditions for some outsourced employees abroad. Parul Koul, the head of the Alphabet Workers Union-CWA that includes members from companies experiencing recent job reductions, observes, "It appears the emphasis on AI and the supposed necessity for workforce adjustments are more about rebranding an already existing trend than about a genuine need stemming from AI adoption." However, Koul points out the challenge in linking specific layoffs to AI advancements due to the lack of clear communication to employees about the reasons behind their job loss, making it difficult to directly associate certain job eliminations with the technology.

The logical progression appears to be observing the impact of companies' investments in AI on their internal operations. However, at present, there isn't a significant trend of AI-induced job reductions within these firms. Job eliminations attributed to AI advancements constitute a minor fraction of the total layoffs in various sectors. Between May 2023 and April 2024, over 5,000 positions were eliminated, with firms attributing these cuts to a pivot towards AI technology development or the implementation of AI systems to assume certain functions and positions. This data comes from a study conducted by the outplacement firm Challenger, Gray, and Christmas.

Within the technology sector, close to 100,000 positions have been eliminated in 2024, as tracked by Layoffs.fyi, a website dedicated to monitoring layoffs within the tech industry. However, certain job categories are starting to see a resurgence. Job listings for positions involving artificial intelligence or requiring AI expertise accounted for 12 percent of all technology-related job openings in May, marking the highest proportion in six years, as reported by CompTIA, a nonprofit organization that serves the IT industry in the United States. Tim Herbert, the chief research officer at CompTIA, notes that AI technology does not operate in isolation. Its integration is expected to drive the creation of new roles that will provide support for this emerging technology. Herbert suggests, "Investments in AI are likely to stimulate growth in related sectors."

The shift towards AI might not signify a complete AI domination, but Koul points out that companies like Alphabet missing out on training their employees for AI-centric roles is concerning. Koul believes that it's possible to navigate this transition with integrity, ensuring the workforce remains valued. "Many of us, including union members, are here due to our dedication to our work's purpose and its impact. We would greatly appreciate more efforts towards offering retraining and facilitating transitions to different departments," Koul emphasizes.

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