US employers cited AI as the reason for 3,900 of the layoffs.
Around 4,000 people who were laid off in May this year lost their jobs because of Artificial Intelligence (AI), a monthly report from Challenger, Gray & Christmas has revealed. The firm said that US employers cited AI as the reason for 3,900 of the layoffs, which is roughly 4.9% of May's job cuts.
The report released on Thursday found that between January and May, there were about 417,500 lost jobs, making it the worst five-month start to a year since 2020, when the onset of the Covid-19 pandemic led to more than 1.4 million layoffs. Outside of the pandemic, the report stated that the start of 2023 produced the worst layoff numbers since the 820,000 layoffs that took place in 2009.
"Consumer confidence is down to a six-month low and job openings are flattening. Companies appear to be putting the brakes on hiring in anticipation of a slowdown," said Andrew Challenger, labour expert and Senior Vice President of Challenger, Gray & Christmas.
Apart from AI, the report also said business closure was the most common reason in May for layoffs, resulting in 19,600 losing jobs. Behind that was "market/economic conditions" for about 14,600 and "no reason provided" for 12,900. During the five months of 2023, economic conditions too prompted the most announced job cuts, cited as the reason for nearly 206,300.
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Meanwhile, according to CBS News, the Challenger, Gray & Christmas report comes at a time when businesses across the globe are adopting advanced AI technology to automate a range of tasks, including creative work, such as writing, administrative and clerical work. Earlier this week, the Washington Post reported that two copywriters lost their livelihoods because employers (or clients) decided that ChatGPT could perform the job at a cheaper price. Media company CNET also laid off reporters while using AI to write articles.
Notably, in March, investment bank Goldman Sachs predicted in a report that AI could eventually replace 300 million full-time jobs globally and affect nearly one-fifth of employment.