Artificial Intelligence: Cutting White-Collar Jobs

Alphabet, Amazon, SAP, Grammarly, DocuSign, Snap, Duolingo—the list of companies announcing layoffs due to generative artificial intelligence (AI) continues to balloon.

Just a few months ago, AI enhancements were presented as complementary tools that would eliminate tedious and repetitive tasks but still require a white-collar supervisor. However, generative AI can now create content and summarize complex ideas, threatening even high-skilled jobs.

A recent PwC global survey of more than 4,700 CEOs from 105 countries shows that 46% of executives expect AI to increase profitability. A quarter of the CEOs said AI’s growth would lead them to job cuts in 2024.

Tech companies have already begun their layoffs. There have been 4,600 job cuts in the US due to AI since May 2023, according to outplacement firm Challenger, Gray & Christmas. And more cuts will follow. German software giant SAP recently announced a shake-up affecting 8,000 jobs as the company pursues more task automation and AI-driven efficiencies.

Logistics company UPS is also looking to reduce its workforce. It plans to eliminate 12,000 jobs, including in the pricing department that calculates what to charge customers—AI can do the math just fine.

White-collar posts are endangered by two trends: the automation of their work and the greater appeal of AI compared to their current field. For instance, online composition aid Grammarly is letting go of 230 of its 1,000 employees as the company adapts to the new age of AI, where grammarians are less in demand. Likewise, Amazon, Alphabet and Snapchat are downsizing hundreds of jobs, but not owing to automation; instead, their leaders are reallocating resources toward promising AI technology. White-collar workers are merely collateral damage. According to the Society for Human Resource Management, endangered species include financial analysts that study market trends, lawyers involved in regulatory compliance, software developers who debug and optimize networks, and human-resource experts. Safe havens from AI are disappearing fast.