MMicrosoft became the latest major tech company to announce mass layoffs on Wednesday. Nearly 5% of the company’s workforce — or 10,000 jobs — will be cut, CEO Satya Nadella announced in a note to employees posted online.
In explaining the decision, Nadella cited global economic conflict, changes in post-pandemic habits, and perhaps most notably the impact of rapid developments in artificial intelligence. Microsoft is a major investor in OpenAI, its chatbot company chat In the past two months the world has excited and awed with his ability to respond to written prompts with clarity and intricacy. “The next major wave of computing is being born with advances in artificial intelligence, as we transform the world’s most advanced models into a new computing platform,” Nadella wrote.
This line in Nadella’s statement raised long-standing concerns about the potential for artificial intelligence to replace many human jobs. Microsoft is throwing 10,000 workers onto the streets to embrace synthetic labor. wrote one commenter on Twitter.
However, experts argue that layoffs at Microsoft and other technology companies have much more to do with current economic conditions than recent breakthroughs in artificial intelligence. The rise of artificial intelligence may have a huge impact on the workforce, but blaming technology for this wave of tech layoffs would be highly misplaced.
said Arun Benanav, author of the book Automation and the future of work And a professor at Syracuse University, says. “So far, all predictions have been proven wrong.”
Technology layoffs have been going fast and hard over the past few months. meta It cut 11,000 jobs in November; Amazon He announced layoffs of 18,000 workers in January; And Salesforce announced another 8,000 vehicles.
These contractions can first be linked to the expansion of the techno-epidemic era. As people spend much more time on home computers, the demand for online services has skyrocketed. As a result, technology companies have grown rapidly and made record profits. Microsoft was among the profiteers rise in 2021. Between June 2021 and 2022, they are It hired 40 thousand employees.
But in the past year, the economic headwinds have changed. First, habits have changed as people return to public spaces, decreasing the importance of technology services at home. “There was this idea that the pandemic would mark this kind of permanent change in behavior: that everyone would work from home and not go to stores or cinemas. And that turned out not to be true,” says Benanav.
Russia’s invasion of Ukraine has put supply chains at risk and raised prices, while the rise of cheap money has spread around the world thanks to fiscal policies and stimulus checks. contributed to rampant inflation. To tame inflation, the Federal Reserve began raising interest rates in hopes that consumers would curb their spending, thus lowering demand and prices for everyday goods.
The impact on the tech world has been particularly severe: More than 150,000 tech workers will be laid off in 2022, according to the tracker. Layoffs. Microsoft was among those companies. While Microsoft relies less on advertising dollars than competitors like Google and Meta — an area it has fallen sharply in the past year — its hardware and cloud services divisions are still affected. While many people bought laptops early in the pandemic to work from home, PC sales have slowed dramatically In 2022. Microsoft’s share price is down 22% from last year.
“When interest rates were so low, companies basically had endless money — and investors were telling them to focus on growth, not profitability,” says Benanav. “But as interest rates go up, there is a shift from large investors to say, ‘No, now you really have to focus on profitability.’ And the big way to do that is through cuts.”
In December, the Federal Reserve raised interest rates again and indicated its intention to continue to raise them in 2023, indicating that the economic outlook for companies like Microsoft is unlikely to improve. The company is scheduled to announce its quarterly earnings next Tuesday.
Nadella, in his open letter, wrote that Microsoft will eliminate roles in some areas while continuing to hire in others. It seems likely that artificial intelligence will be part of the latter category. Like many other technology companies, Microsoft has invested heavily in artificial intelligence, based on the belief that its capabilities will increase efficiency in every area. Earlier this month, Semaphore reported that Microsoft is hoping to invest in another company $10 billion At OpenAI, the company behind the hugely popular ChatGPT app.
ChatGPT does not yet have a business model to earn revenue from OpenAI or Microsoft. But such a deal would put Microsoft at the forefront of AI technology and all its improvements. This could help Microsoft’s Bing search engine — which currently lags far behind Google — as well as Microsoft’s cloud business, which follows Amazon Web Services.
During an interview at the 2023 World Economic Forum this week, Nadella said Microsoft plans to build artificial intelligence into all of its products. He also argued that workers will become more efficient and productive in combination with AI: “I see these technologies as co-pilots, helping people get more done with less.” He said.
While it is certainly possible that some jobs will be eliminated by AI, some forecasters believe that more will be added. last year, World Economic Forum that artificial intelligence will replace 85 million jobs by 2025 but will create 97 million new jobs.
Kevin Kelly, founding executive editor of Wiredrecently wrote a file Article arguing that there is a long history of technology augmenting human labor rather than replacing it. He referred to a panic in the nineteenth century, when many feared that the advent of the camera might put portrait painters out of business. But historian Hans Rosebohm could only find a single portrait painter from that time who felt that painting led to his nullity.
Others argue that there are jobs to be found in AI, particularly in data science and machine learning. However, some of these new jobs can be low quality and even dangerous. A TIME investigation found that OpenAI employed outsourced Kenyan workers paid less than $2 an hour to review toxic content, including sexual assault, hate speech and violence. All four employees interviewed by TIME described being mentally scarred by work.
Read more: OpenAI employed Kenyan workers for less than $2 an hour to make chat less toxic
“Despite the foundational role played by data enrichment professionals, a growing body of research is revealing the precarious working conditions that OpenAI faces,” the Partnership on Artificial Intelligence, a consortium of AI organizations to which OpenAI belongs, wrote on its website. these workers.” “This may be a result of efforts to disguise AI’s reliance on such a large workforce when celebrating the technology’s efficiency gains.”
“The hidden demand to work with current AI technologies is huge,” says Benanav. “There are all these claims about how much software and software can do it automatically. But behind the scenes, there are often a lot of people who have to take on the roles of doing the actual work: checking what the AI generates and dealing with all the problems it generates.” Much of this work is external to low-paid workers in countries around the world.”
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