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Aiifi Staff

AI Job Losses in 2023

So far this year 122,900 layoffs have been announced that are linked to Artificial intelligence with that number expected to mushroom into the millions over the coming decade.


Sometimes it feels like every news article about Artificial Intelligence is warning us of the impending job-loss apocalypse and the dangers of AI. Although there are no doubt some risks associated with the rapid rise of these new technologies, it can pay to take stock of what is actually happening in the economy. Here we track layoff announcements related to AI and you will clearly notice some common themes: automation and cost-cutting are the primary drivers of job losses due to AI in 2023.

AI Job Losses in 2023 are driven by automation

McKinsey - 2,000 jobs

Announced February 2023


McKinsey & Company is one of the top, if not the top name, in management consultancy, but they are not immune from rising cost pressures. Their announcement comes as part of Project Magnolia, a program to preserve the compensation of the firm's partners, as reported by Reuters. Although AI was not directly referenced, the language included the usual related terms. The losses will center on support staff, an ability to scale operations, and "redesigning the way our non-client-serving teams operate".


Meta - 10,000 jobs (Facebook)

Announced March 2023


As part of a wider post-pandemic trend among the tech darlings, Meta engaged in significant layoffs in 2023 and started things off with an announcement in March that 10,000 roles would go. Again, there was no explicit mention of AI in the announcement but the company has talked about flattening its management structure and increasing automation.


Accenture - 19,000 jobs

Announced March 2023


The mammoth Irish consultancy firm plans to trim its staffing numbers by 2.5% or roughly 19,000 over the next 18 months. More than half the layoffs will be in back-office functions with industry experts expecting, once again, that automation will be a primary driver. In their report to The SEC, Accenture stated its goal was to "transform our non-billable corporate functions to reduce costs.” Reading between the lines, this transformation could include a lot of AI software.

Accenture is one of the largest employers in the world.

Amazon - 27,000 jobs

Announced March 2023


Another of the tech giants went on a cost-cutting drive in 2023 when Amazon announced a plan to cut 27,000 jobs, predominantly in advertising and related fields. Similar to Meta they did not actually attribute any of the job cuts to AI - but reading between the lines of automation and cost-cutting it seems a safe bet that AI played a part.


Vodafone - 11,000 jobs

Announced May 2023


The European telecoms giant will replace 10% of its workforce through automation as part of aggressive cost-cutting measures. Although they did not explicitly reference Artificial Intelligence it's widely believed to be a key driver. Vodafone has deployed an AI customer care agent, TOBi, in an effort to become “as lean as possible” freeing up hundreds of millions of euros for marketing and customer experience.

Vodafone AI customer service bot, TOBi

IBM - 7,800 jobs

Announced May 2023


The technology giant announced in May 2023 that up to 30% of its workforce could be replaced by AI with immediate plans to pause all hiring. CEO Arvind Krishna said the company plans to replace 7,800 back-office jobs with AI over the next few years, starting with HR.


BT - 10,000 jobs

Announced May 2023


The British telecoms behemoth announced that 55,000 jobs would be cut by the end of the decade due to cost-cutting and automation. The announcement heavily focused on AI, with CEO Philip Jansen going as far as saying, “We will be a beneficiary of AI unequivocally because we are a volume business.” That being said, only 10,000 of the 55K job losses were directly attributed to AI. Once again the focus of AI job losses would be on customer support and back-office functions. Unsurprisingly, Jansen is a big fan of BT's customer service chatbots.

“Does everyone know it’s a chatbot? Of course they don’t.”

Miscellaneous - 3,900 jobs

Announced May 2023


The highly regarded Challenger Report recorded almost 4,000 job losses in May of 2023. Although the report does not name specific companies it does mention record-breaking layoffs in the media industry with news organizations particularly impacted. This is the first time Artificial Intelligence has been noted as a cause of job losses in this report.

AI Job Losses May 2023

Bild - 200 jobs

Announced June 2023


Written media is widely considered to be one of the industries most vulnerable to artificial intelligence, and generative AI in particular. With the explosion of tools like ChatGPT the German publisher Bild announced 200 redundancies along with a promise to make more cuts on the back of “the opportunities of artificial intelligence”. Staff of the newspaper were told, “unfortunately be parting ways with colleagues who have tasks that in the digital world are performed by AI and/or automated processes”.


US Advertisers - 32,000 jobs (via Forrester)

Announced June 2023


Up to 7.5% of jobs in American advertising agencies will disappear by 2030 according to leading research firm Forrester. This equates to 32,000 redundancies over the next seven years. Once again, automation is a big driver here with "problem-solving" jobs expected to remain untouched or even thrive as AI improves our ability to gather and analyze data.


The Global Economy - 300 million jobs

Predicted by Goldman Sachs March 2023


Leading investment bank GS expects that artificial intelligence and generative AI in particular could cost The US and Europe up to 300 million jobs over the coming years. They are not specific on timelines but the headline number of 300,000,000 jobs is still eye-catching. This is a staggering number and admittedly their published report is light on details and heavy on assumptions but even if they are remotely right this is a worry.


Hollywood - an unknown number of jobs

Part of the ongoing writers' strike.


The Writers Guild of America (WGA) which represents 11,500 Hollywood writers went on strike on May 2, 2023, and at the time of writing is still ongoing. One of the key concerns is the potential use of artificial intelligence to replace writers. This feels like the first step in a protracted battle for jobs in creative writing roles and we will of course monitor the situation closely.


Wimbledon Tennis - an unknown number of jobs

No-job AI services from The All England Club & IBM


The live nature of sports broadcasting has traditionally insulated it from media cutbacks but this year The All England Club is testing a new AI-powered commentary service using IBM's watsonx software. This will give text commentary and captions in the “unique language of tennis” during the Wimbledon tennis tournament. There is no direct link between this particular product and job losses but the direction within the industry is abundantly clear.


The Impact of AI on Jobs Losses in 2023


The impact of AI on the jobs market in 2023 has been almost entirely centered on automation and cost-cutting. This should be no surprise. The cost of living crisis is driving wage inflation, which along with rising interest rates is putting companies under significant pressure to slash expenses. The aggressive adoption of AI tools that reduce headcount will be the early, and dare I say obvious, use case of AI in business. However, some more nimble organizations will look at how AI can offer new services, and not simply automate old ones.


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