Will the wind of layoffs that has been blowing since the beginning of the year become a reality for AI-enabled job encroachment?

Google announces hundreds of layoffs this year, following 10,000 layoffs last year
Google employees fiercely criticize “management’s tyranny, extremely inhumane”
Ahead of the AI ​​era, tech companies are laying off workers, and AI is replacing jobs

Google and Amazon have carried out large-scale layoffs this year, following last year. Although the justification was to pursue efficiency, in reality, it is analyzed that the main cause is work substitution and automation due to AI. This is evidenced by the trend of focusing on AI-related investments instead of reducing manpower.

Massive layoffs at Google, Amazon

According to a CNN report on the 16th (local time), Google recently fired a large number of employees in charge of assistant programs and hardware. The exact scale is unknown, but hundreds of people are said to have been affected, including employees in charge of assistant (AI assistant) programs and hardware. James Park and Eric Friedman, co-founders of the smartwatch ‘Fitbit’ acquired in 2021, also decided to leave Google as a result of the reorganization.
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However, as Google has not officially explained the layoffs to employees, employees are criticizing management. On Memegen, Google’s internal meme bulletin board, a post was posted regarding this layoff, calling it “tyranny by management,” and this post received thousands of ‘likes’. Another post sarcastically said, “Thank you for our new annual tradition.” One engineer who was the subject of this restructuring expressed his humiliation in a letter to his colleagues, saying the dismissal “felt extremely inhumane.” He added, “Google’s culture has completely changed since the company carried out its first large-scale layoffs last year,” adding, “I am not surprised by this new round of job cuts.”

Meanwhile, the wind of layoffs does not stop at Google. Many American tech companies, including Amazon, are reducing their workforce ahead of the AI ​​era. According to CNBC on the 11th (local time), Amazon laid off 500 people in its Twitch live streaming department, followed by hundreds of people across its Prime Video and MGM Studios divisions. This measure was already announced at the end of last year. Following this, online chat platform Discord and mobile game Pokémon Go developer Unity Software also laid off 17% and 25%, respectively. In the case of Duolingo, an online language learning company, the number of contract employees was reduced by about 10%.

Fear of job loss due to AI looming just around the corner

Experts agree that AI is behind the layoffs. The explanation is that the intention is to reduce unnecessary personnel by focusing on AI development and investment. In fact, in November of last year, Amazon laid off hundreds of voice assistant Alexa team members and announced that it would withdraw from music and games due to its focus on AI. According to foreign media, more than 27,000 people lost their jobs through the largest-ever layoffs that lasted from the end of 2022 to 2023. Since the end of last year, Amazon has been installing generative AI into Alexa, focusing on developing large-scale language models (LLM), and at the same time making significant investments in AI startups.

Google, which is leading the generative AI craze along with Microsoft (MS), has also been reducing costs by introducing AI tools designed to automate the creation of new ads over the years. After developing ‘Performance Max (PMax)’, an AI-based advertising platform, in 2021, it was equipped with a generative AI function in May of last year. Google is reportedly reducing costs worth tens of billions of dollars by increasing the use of AI in its advertising platform.

PMax uses AI to automatically generate or suggest advertising headlines, descriptions, images, etc. to increase time and cost efficiency. In this regard, CNN explained that more and more advertisers are adopting platforms equipped with generative AI, and that the need for employees specializing in advertising has decreased. In particular, job cuts at Google and Amazon are drawing attention as they come out a few months after announcing that they would invest billions of dollars in AI startup Anthropic.

Cloud company Dropbox also decided to reinforce AI-related personnel instead of laying off 500 people, or 16% of its total employees, in April last year, and IBM also stopped hiring 7,800 new people, focusing on support functions such as human resources. They announced that they would replace related tasks with AI. Goldman Sachs predicted that approximately 300 million jobs could disappear due to the introduction of generative AI, and that office workers in particular will be hit the hardest.