{"id":251245,"date":"2025-10-31T00:53:14","date_gmt":"2025-10-31T00:53:14","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/251245\/"},"modified":"2025-10-31T00:53:14","modified_gmt":"2025-10-31T00:53:14","slug":"is-ai-leading-to-layoffs-or-does-the-economy-just-suck","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/251245\/","title":{"rendered":"Is AI Leading to Layoffs or Does the Economy Just Suck?"},"content":{"rendered":"

It\u2019s not a particularly good time to be a (human) worker in America. Tens of thousands of people have been laid off over the past several days, and the general outlook for job-seekers appears grim<\/a>, to say the least. This week, Amazon announced plans<\/a> to neutralize some 14,000 positions, while Meta said it would purge several hundred people from various offices throughout California<\/a> and Washington state<\/a>. Chegg, the online learning platform, announced plans to reduce its workforce<\/a> by a whopping 45 percent on Monday. Several other large American companies\u2014including FedEx, Paramount, General Motors, Target, and UPS\u2014similarly announced plans to eliminate jobs.<\/p>\n

The consensus seems to be that this sudden employment blood bath may just be the birthing pangs of the new AI age\u2014a time in which jobs are no longer an indicator of economic success, I guess. Headlines about the layoffs have routinely included AI as a factor<\/a>, a trend encouraged by the companies themselves. Indeed, in Amazon\u2019s announcement about its new downsizing, the company\u2019s executive, Beth Galetti, cited AI, noting that the company needs to be \u201corganized more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business.\u201d Similarly, in its layoffs announcement, Chegg cited the<\/a> \u201cnew realities of AI\u201d as a factor.<\/p>\n

But is it really AI\u2019s fault, or is it just the case that the American economy is currently riding a one-way ticket to the trash heap? Is an AI-ified economy one with fewer jobs? Or does a bad economy just mean more AI? Or are the companies suffering from other ailments and simply leaning into the AI narrative for cover?<\/p>\n

NBC News recently interviewed<\/a> an economic scholar who seemed skeptical of the narrative surrounding job loss and AI. \u201cIt\u2019s much easier for a company to say, \u2018We are laying workers off because we\u2019re realizing AI-related efficiencies\u2019 than to say \u2018We\u2019re laying people off because we\u2019re not that profitable or bloated, or facing a slowing economic environment, etc,\u2019\u201d David Autor, a professor of economics at the Massachusetts Institute of Technology, said. \u201cWhether or not AI were the reason, you\u2019d be wise to attribute the credit\/blame to AI,\u201d he added.<\/p>\n

BBC, meanwhile, recently interviewed<\/a> Martha Gimbel, executive director of the Budget Lab at Yale University, who felt that the AI talk was overblown. \u201cA lot of this conversation feels very different to people because the phrase AI is in it,\u201d Gimbel told the outlet. \u201cBut so far, nothing that I\u2019ve seen looks different than typical patterns of companies hiring and firing, particularly at this point in an economic cycle.\u201d<\/p>\n

In other words, companies may be simply saving face by pretending that losing team members and downsizing is really just part of a glorious pivot towards \u201cleaner,\u201d \u201cmore efficient\u201d automation. In reality, these companies may be hurting and may be taking advantage of the current narrative around AI to spin that hurt into PR gold.<\/p>\n

If you\u2019re a large company, you\u2019d be forgiven for not feeling your best these days. Indeed, the indicators for the U.S. economy right now are, in a word, bad. Conveniently for Trump, the U.S. government continues to be shut down, which means that the organizations that would traditionally monitor and report on the nation\u2019s economic health (like the Fed<\/a>) are unable to do their jobs<\/a>. However, even without official government analysis, financial experts are expressing skepticism about the health of the economy.<\/p>\n

For instance, Morningstar, a financial services firm that specializes in economic analysis, recently noted that<\/a> U.S. GDP growth in the first half of 2025 was lower than in previous years, and that this growth slump is expected to continue for the foreseeable future, with consumers becoming more and more cautious about spending. Additionally, consumer sentiment and the strength of the labor market have both been weakening, the report says, citing the most recent job growth data provided by the government:<\/p>\n

There are multiple ways to look at the health of the US labor market, which is tied to the overall health of the economy. Job growth is a primary indicator\u2026The US economy\u00a0added just 22,000 jobs in August\u00a0as unemployment continued to rise. That number is well below what economists had previously expected and the 79,000 reported in July. The revised June numbers from the Bureau of Labor Statistics show that the US economy lost 13,000 jobs in June.<\/p>\n

The report also notes that inflation has continued to stick around, and the price of goods has shot up \u201cin response to tariffs, as producers started passing along higher import prices.\u201d<\/p>\n

In short, due to the Trump administration\u2019s bizarre policies, there is a lot of economic uncertainty right now, and uncertainty, as we all know, isn\u2019t great for markets. As an example, next month, the Supreme Court is set to rule<\/a> on whether Trump\u2019s tariffs\u2014which have been challenged by lawsuits\u2014are legal or not. If they prove to be illegal, the Trump administration may have to facilitate the repayment of all of the revenue<\/a> generated by those tariffs, which would be logistically insane and a hugely disruptive process for the federal government. As we all know, uncertainty is, itself, not great for an economy, since, to confidently maneuver and make money, businesses need to know that they can put one foot in front of the other without falling down a manhole.<\/p>\n

So are layoffs happening because more companies are adopting AI or because the economy is doing poorly? Or for some other reason? From the outside, it\u2019s impossible to tell, but suffice it to say, there is definitely more than one possible explanation for why companies are currently shedding jobs like nobody\u2019s business. The situation may be more mundane<\/p>\n","protected":false},"excerpt":{"rendered":"It\u2019s not a particularly good time to be a (human) worker in America. Tens of thousands of people…\n","protected":false},"author":2,"featured_media":251246,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[62,971,276,277,49,48,117311,281,61,125],"class_list":["post-251245","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-amazon","tag-artificial-intelligence","tag-artificialintelligence","tag-ca","tag-canada","tag-chegg","tag-meta","tag-technology","tag-unemployment"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/251245","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=251245"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/251245\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/251246"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=251245"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=251245"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=251245"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}