Artificial intelligence is already linked to layoffs in the industry that created it

() — Many have warned of the potential for artificial intelligence (AI) to wipe out jobs in the coming years, but it’s already causing a stir in an industry where workers once seemed invincible: technology.

A small but growing number of tech companies have pointed to AI as a reason to lay off workers and reconsider new hires in recent months as Silicon Valley scrambles to adapt to the rapid advances in technology that are unfolding across the globe. your own backyard.

Chegg, an educational technology company, revealed in a regulatory filing last month that it would cut 4% of its workforce — about 80 employees — “with the goal of better positioning the company to execute on its AI strategy and create long-term sustainable value for its students and investors.”

IBM CEO Arvind Krishna said in an interview with Bloomberg, last May, that the company expects to pause hiring for roles that it believes could be replaced with AI in the coming years. (However, in one post interview with Barron’s, Krishna said he felt his comments had been taken out of context and emphasized that “AI will create more jobs than it will eliminate”).

And in late April, file storage service Dropbox said it was cutting about 16% of its workforce — about 500 people — also citing AI.

In its most recent layoff report, relocation firm Challenger, Gray & Christmas said 3,900 people were laid off in May due to AI, the first time job cuts have been broken down based on that factor. All of those cuts occurred in the technology sector, according to the firm.

With these moves, Silicon Valley may not only lead the way in AI development, but also offer a preview of how companies can adapt to such tools. Rather than making entire skill sets obsolete overnight, as some might fear, the more immediate impact of a new breed of AI tools appears to be forcing companies to shift resources to better take advantage of the technology, and give a premium to workers with AI expertise.

“Over the past few months, AI has captured the world’s collective imagination, expanding the potential market for our next generation of AI-powered products more rapidly than any of us could have anticipated.” wrote Dropbox CEO Drew Houston in a note to staff announcing the job cuts. “Our next stage of growth requires a different mix of skill sets, particularly in AI and early-stage product development.”

In response to a request for comment on how its realignment around AI is playing out, Dropbox directed to its careers page, where it is currently hiring for multiple roles focused on “New AI Initiatives.”

Dan Wang, a professor at Columbia Business School, told that AI “will cause organizations to restructure,” but he also doesn’t see machines replacing humans just yet.

“AI, from my point of view, doesn’t necessarily replace humans, but enhances the work of humans,” Wang said. “I think the kind of competition that we all should think about more is that human specialists will be replaced by human specialists who can take advantage of AI tools.”

A tale of two Silicon Valleys

The AI-driven tech layoffs come amid broader industry cutbacks. Many technology companies have been readjusting to an uncertain economic environment and declining levels of demand for digital services, more than three years after the pandemic.

Some 212,294 tech industry workers were laid off in 2023 alone, according to data tracked by layoffs.fyialready exceeding the 164,709 registered in 2022.

But in the shadow of those layoffs, the tech industry has also been caught up in the AI ​​fervor and invested heavily in talent and technology.

In January, just days after Microsoft announced plans to lay off 10,000 employees as part of broader cost-cutting measures, the company also confirmed it was making a “multi-billion dollar” investment in OpenAI, the company behind ChatGPT. And in March, in the same letter to staff that Mark Zuckerberg used to announce plans to lay off another 10,000 workers (after cutting 11,000 positions last November), the Meta CEO also outlined plans to invest heavily in AI.

Even the engineers software in Silicon Valley, which once seemed uniquely in demand, now appear to be at risk of losing their jobs or losing wage gains relative to those with more AI experience.

Roger Lee, a founder of startups who has been tracking tech industry layoffs through his Layoffs.fyi website, also runs Comprehensive.iowhich examines job listings and compensation data at some 3,000 tech companies.

Lee told that a recent analysis of data from Comprehensive.io shows that the average salary for a software A senior who specializes in artificial intelligence or machine learning is 12% higher than those who don’t specialize in that area, a data point he calls “the AI ​​premium.” The average salary of an engineer software A senior specializing in AI or machine learning has also risen 4% since the start of the year, while the median salary for IT engineers software overall has been flat, he said.

Lee pointed to Dropbox as an example of a company that offers remarkably high salaries for AI roles, citing a base salary listing between $276,300 and $373,800 for a Machine Learning Lead Engineer role. (For comparison, data from Comprehensive.io puts the current median salary for a software engineer at software senior at US$171,895).

Those looking to thrive in the tech industry and beyond may need to brush up on their AI skills.

Wang, the Columbia Business School professor, told that starting in the last spring semester, he began requiring his students to familiarize themselves with the new generation of generative AI tools on the market. “I think that kind of exposure is absolutely critical to setting yourself up for success once you graduate,” Wang said.

It’s not that everyone should become an AI specialist, Wang added, but that workers should know how to use AI tools to be more efficient at whatever they’re doing.

“That’s where the type of battlefield for talent is really changing,” Wang said, “as differentiation in terms of talent comes from creative and effective ways to integrate AI into daily tasks.”