AI as a Scapegoat: Unveiling the True Reasons Behind Corporate Layoffs

Companies across the U.S. and Europe are increasingly blaming artificial intelligence (AI) for widespread job cuts, but critics argue it's a convenient excuse for tough business decisions. From tech giants to airlines, firms are citing AI as the reason for layoffs, even as experts suggest other factors may be at play.

Accenture, Lufthansa, and Salesforce Lead the Way in AI-Justified Cuts

Accenture announces a restructuring plan that includes quick exits for workers unable to reskill on AI. Lufthansa follows suit, planning to eliminate 4,000 jobs by 2030, leaning on AI to boost efficiency. Salesforce lays off 4,000 customer support roles, claiming AI can handle 50% of the work. Fintech firm Klarna reduces its staff by 40% while aggressively adopting AI tools, and Duolingo plans to phase out contractors in favor of AI.

Critics Question the Real Motives

Fabian Stephany, assistant professor of AI and work at the Oxford Internet Institute, is skeptical. 'I'm really skeptical whether the layoffs that we see currently are really due to true efficiency gains. It's rather really a projection into AI in the sense of 'We can use AI to make good excuses,' he tells CNBC. Companies might be using AI as a scapegoat to appear innovative and competitive while concealing the real reasons for layoffs, such as overhiring during the pandemic.

Overhiring During the Pandemic: A Key Factor?

Some companies that thrived during the pandemic significantly overhired, and recent layoffs might just be a market correction. 'It's to some extent firing people for whom there had not been a sustainable long-term perspective, and instead of saying 'we miscalculated this two, three years ago,' they can now come to the scapegoating, and that is saying 'it's because of AI though,' Stephany adds.

Industry Voices Weigh In

Jean-Christophe Bouglé, co-founder of Authentic.ly, says AI adoption is at a 'much slower pace' than claimed. 'At the same time, there are announcements of big layoff plans 'because of AI.' It looks like a big excuse, in a context where the economy in many countries is slowing down, despite what the incredible performance of stock exchanges suggests,' he writes in a popular LinkedIn post.

Feeding the Fear of AI

Careers expert Jasmine Escalera warns that this concealment is 'feeding the fear of AI.' Employees globally are concerned about their jobs being replaced by AI. 'So we already know that employees are scared because companies are not being honest, open, and communicative about how they're implementing AI. Now companies are openly stating 'We're doing this [layoffs] because of AI' so it's feeding the frenzy,' Escalera tells CNBC Make It. She urges big companies to be more responsible and avoid greenlighting 'bad behavior.'

References

• Companies are blaming AI for job cuts. Critics say it’s a 'good excuse'