AI-Driven Layoffs with Data

The AI transformation process is now accelerating in every aspect. We are entering a phase where the users of these technologies will impact the economy more than the producers. As AI brings transformation across sectors, its potential to cause layoffs and even eliminate certain professions is being discussed. However, while some believe AI will replace certain jobs, experts also suggest it could create new job opportunities. This raises the question: Is AI responsible for layoffs?

Various factors contribute to layoffs, such as the pandemic, high inflation leading to increased interest rates, and global economic contractions. Companies are downsizing or cutting costs due to these challenges. Global tensions, supply chain crises, the Russia-Ukraine war, and Israel’s actions in Palestine have also contributed to economic uncertainty. Additionally, technological advancements and competition among businesses to invest in these developments have led to an increased reliance on AI and automation, resulting in more layoffs.

Many technology companies have labeled this year as the “year of efficiency,” leading to significant layoffs. In 2023 and the current year, layoffs have been most intense, with major global companies in the US and Europe reducing their workforce. Companies like Amazon, Google, Twitch, eBay, and Riot Games are among those announcing layoffs.

Recent research highlights a significant transformation in the workforce due to AI usage. According to Layoffs.fyi, in 2023, 1,192 tech companies laid off a total of 263,180 employees. In the first four months of 2024, nearly 300 tech companies let go of over 78,500 employees. Companies planning to use AI this year or next expect that 44% will definitely (21%) or probably (23%) lay off employees due to AI. This means that by the end of 2024, approximately one in three companies may lay off employees because of AI.

While some worry that AI will eventually take over the world, experts argue otherwise, based on research. According to PwC, advancements in AI could increase global GDP by up to 14%, or more than $15 trillion, by 2030. Some believe economic prosperity will increase alongside these advancements. However, AI usage affects employment across all sectors, from manufacturing to retail and other services, and is reshaping the job market. The World Economic Forum’s reports indicate that sectors like manufacturing, retail, and healthcare are most affected by AI-driven layoffs. By 2027, 42% of job tasks are expected to be fully automated, with this figure reaching 65% in data-driven jobs. However, in low-income countries, only 26% of jobs are at risk of being affected by AI.

AI and automation technologies have significantly impacted assembly line jobs. Recent research indicates that about 40% of layoffs linked to AI are due to automation capabilities developed through AI. By 2030, approximately 20 million manufacturing jobs could be lost due to automation.

AI-driven automation affects not only production processes but also decision-making processes. Companies using or planning to use AI in 2024 believe that AI experience is essential, with 65% considering it very beneficial and 31% somewhat beneficial.

According to Ipsos research, the percentage of people who believe this issue will significantly impact their lives in the next five years has risen from 60% to 66%. AI products and services increase anxiety for 52% of respondents, a 13% increase from two years ago. This American survey indicates that anxiety grows alongside the rise in AI usage.

AI is causing shifts in the workforce. Based on data showing AI’s growing impact on the workforce, it’s clear that both layoffs and job changes will accelerate workforce transformation. To address these changes, employees need to upskill. Developing AI skills, embracing continuous learning, and adapting to innovations are now essential. Learning basic coding, AI management, data analysis, and AI application integration are key areas for employees to focus on.

Adapting to AI-driven changes requires employees to engage in continuous learning and development. Employees must update their skills and learn to apply them to current innovations. Staying informed about technological advancements and applying these to the workforce is crucial. Career flexibility is also important, allowing employees to explore new opportunities in the event of job loss. Diversifying skills and developing hobbies that could turn into expertise can increase this flexibility.

AI and data science are among the most in-demand skills in the modern job market. Employees who develop skills in data analysis, machine learning, and programming can enhance their job security. They can utilize platforms like Coursera, Udemy, and LinkedIn Learning for courses and certifications in these areas. Universities and educational institutions also offer online and in-person training programs. Additionally, mentoring and coaching from experienced professionals can guide career development.

Creative and critical thinking skills are among the most important in today’s world. According to Open AI CEO Sam Altman, critical and creative thinking will be highly valued in a future where everyone uses AI. These human thinking skills, which AI cannot yet replicate, are vital for developing and presenting innovative projects. Enhancing creative problem-solving skills can make employees more valuable. Innovating in work processes and using analytical thinking in decision-making can also increase job security.

Skill development, whether supported by companies or pursued individually, has become increasingly important. Companies and governments need to develop training programs that encourage skill acquisition for the job market. In the future, reskilling and upskilling programs will be crucial for workforce adaptation to these changes. Companies and governments must adopt a vision that rapidly adapts to innovations and emphasizes skill development.