AI as a Scapegoat: Firms Use Tech to Justify Layoffs and Conceal True Motives

Companies across the U.S. and Europe are increasingly blaming artificial intelligence (AI) for job cuts, sparking criticism that they are using the technology as a convenient excuse for layoffs. Critics argue that firms are scapegoating AI to mask the real reasons behind their downsizing decisions.

Companies Cite AI for Job Cuts

From tech giants to airlines, large global companies are slashing staff, citing the impact of AI. Accenture, Lufthansa, Salesforce, Klarna, and Duolingo are among the firms that have announced significant layoffs, attributing them to the adoption of AI technologies.

Accenture recently unveiled a restructuring plan that includes quick exits for workers who cannot reskill in AI. Lufthansa plans to eliminate 4,000 jobs by 2030, leaning on AI for increased efficiency. Salesforce laid off 4,000 customer support roles, claiming AI can handle 50% of the work. Klarna has reduced its workforce by 40% as it adopts AI tools, while Duolingo is gradually replacing contractors with AI.

Critics Call Out 'Scapegoating'

Fabian Stephany, assistant professor of AI and work at the Oxford Internet Institute, is skeptical about the true reasons behind these layoffs. He argues that companies are using AI as a scapegoat to justify challenging business moves.

"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,'" Stephany said in an interview with CNBC.

Stephany suggests that companies may be overhyping AI to appear innovative and competitive, while concealing the real reasons for layoffs. "There might be various other reasons why companies are having to get rid of part of their workforce. Some companies that flourished during the pandemic significantly overhired, and the recent layoffs might just be a market clearance," he added.

Industry Context and Concerns

Online discussions reflect similar skepticism. Jean-Christophe Bouglé, co-founder of Authentic.ly, noted in a popular LinkedIn post that AI adoption is at a much slower pace than claimed. He pointed out that in many large corporations, AI projects are being rolled back due to cost or security concerns.

"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 suggest," Bouglé said.

Feeding the Fear of AI

Jasmine Escalera, a careers expert, warns that this concealment is feeding the fear of AI. Employees globally are concerned about their jobs being replaced by AI, and companies' lack of transparency is exacerbating these fears.

"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 told CNBC Make It.

Escalera emphasized that big companies need to be more responsible, setting a better tone for business decision-making and avoiding the greenlighting of bad behavior.

References

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