(qlmbusinessnews.com . Fri 31st Oct, 2025) London, UK —
AI and Employment: Analyzing the Impact of Technology on Workforce Dynamics
Amazon's recent decision to cut thousands of corporate positions has intensified the ongoing concern regarding Artificial Intelligence's role in workforce displacement.
The corporate giant is among an increasing roster of US businesses attributing layoffs to advances in AI technology.
However, the narrative that AI is wholly responsible for job reductions has been met with scepticism. Some argue that the layoff announcements from high-profile companies might not accurately reflect the broader impact of AI on employment levels.
Chegg, an online education provider, pointed to the “new realities” posed by AI as it confirmed a 45% staff reduction this Monday. Salesforce, last month, attributed the elimination of 4,000 customer service jobs to AI capabilities, according to statements from its CEO.
UPS also joined the discourse, announcing a reduction of 48,000 jobs since the previous year, linking part of these cutbacks to machine learning, as stated by its chief executive.
Martha Gimbel, Executive Director of the Budget Lab at Yale University, cautions against using these executive statements as a basis to gauge AI's impact on employment. She suggests that other company-specific factors could be influencing these decisions.
“There's a tendency to overreact to company announcements due to widespread concern about AI's potential impact on the job market,” Ms Gimbel remarked.
Indeed, certain job sectors, such as recent graduates and data centre workers, appear more susceptible to the adoption of AI technology.
Research from the Federal Reserve Bank of St Louis draws a connection between the prevalence of AI in certain occupations and a rise in unemployment since 2022.
However, Morgan Frank, Assistant Professor at the University of Pittsburgh, found that post the launch of ChatGPT by OpenAI in November 2022, only office and administrative support sectors saw a significant uptick in unemployment claims early in 2023.
“For computer and maths fields, there was no significant employment trend change following ChatGPT’s release,” he noted.
According to Mr Frank, both tech and admin employees are facing a tougher job market than in previous years, but it's not entirely fair to blame AI for the downturn.
As for Amazon and its tech industry counterparts, a hiring surge in response to near-zero US interest rates during the early pandemic period set the stage for subsequent workforce pruning, a dynamic distinct from recent AI developments.
The generative AI explosion over the last trio of years occurred alongside Federal Reserve's interest rate hikes, coinciding with ChatGPT's market entry.
“This discussion around AI feels novel to many, but nothing indicates a departure from typical hiring and firing cycles seen in economic patterns,” said Ms Gimbel.
The question remains whether hiring trends will change during periods of economic growth, as distinguishing between cyclical and AI-driven job losses becomes even more critical.
Amazon's strategic trimming of approximately 14,000 corporate roles underscores its aim to streamline and capitalise on AI opportunities.
Despite the layoffs, Amazon continues to perform robustly, surpassing analysts' predictions with a 13% annual increase in sales to £125 billion.
Enrico Moretti of UC Berkeley notes that giants like Amazon are pioneering AI-induced layoffs, benefiting from their dual role as AI developers and users.
Lawrence Schmidt of MIT Sloan Management highlights Amazon's unique position to accelerate job automation due to its size, suggesting an inevitable job market realignment.
Regardless of the overall job count, the expectation is for a shift in the labour landscape, driven in part by AI's integration into corporate strategies.
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