AI is Already Taking Jobs En-Masse – IBM to Halt Hiring to Replace 7,800 Jobs With AI

International Business Machine Corp. (IBM) CEO Arvind Krishna said the company will halt hiring and replace 7,800 non-customer-facing jobs with artificial intelligence (AI). While this is certainly not the first case of jobs being replaced with AI, it is nonetheless worrying for workers.

As AI systems become increasingly sophisticated, the fears of job displacement en-masse are quickly becoming reality, with IBM being one of the first major companies to announce such a significant step.

IBM is looking to eliminate mostly back-office roles that AI could best replace, such as administrative and support positions. Krishna added that AI could replace up to 30% of its non-customer facing roles in 5 years.

IBM’s decision is part of a much larger trend of cost cutting in tech. Compared to some tech companies, IBM’s move to replace 7,800 workers in 5 years is modest.

According to TechCrunch, more than 176,000 employees in the tech sector were laid off this year. Amazon has cut 27,000 jobs in 2023 so far, roughly 8% of its workforce. Meta laid off 10,000 employees in 2023 after cutting 11,000 jobs in November.

These cost-saving measures don’t end with layoffs. Tech companies are looking for any way to cut pennies off of their costs.

Ruth Porat, the CFO of Google’s parent company, Alphabet, announced a wave of penny-saving measures including cutting back on little things like employee fitness classes and even staplers and tape.

Buying fewer staplers and tape may save a buck here or there but labor constitutes the largest cost for most companies. With AI improving so rapidly, it’s hard to imagine that companies won’t try as hard as they can to replace jobs with software.

The concern over job loss due to AI is not limited to administrative roles. Even artists are being replaced by tools like Midjourney and Microsoft’s new Designer tool.

AI can’t replace entire workforces yet. At the current state of AI technology, these systems can’t even entirely replace most jobs. However, they can make workers exponentially more efficient, requiring companies to hire fewer employees in their sectors.

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