A recent study conducted by the US-based consulting firm Challenger, Gray & Christmas reveals that the implementation of artificial intelligence (AI) has led to a significant loss of jobs in the United States. In May alone, approximately 3,900 individuals were laid off due to AI, accounting for around 4.9% of the total job cuts during that period. The total number of job cuts announced by US employers in May reached 80,089, marking a substantial 20% increase compared to the previous month and a staggering 287% surge compared to May of the previous year.
Technology Industry Hardest Hit: 22,887 Job Cuts in May
When examining specific sectors, the technology industry emerges as the hardest hit, with the highest number of job cuts in May totaling 22,887. Since the beginning of the year, the technology sector has witnessed a massive increase of 2,939% in job cuts, with a total of 136,831 announced compared to 4,503 during the same period last year.
Other Sectors Affected:
- Retail: The retail sector takes the second spot in terms of job cuts announced in May, with 9,053 reported. Throughout the year, retailers have announced a total of 45,168 job cuts, marking an alarming increase of 942% compared to May 2022.
- Automotive: In the automotive industry, 8,308 job cuts were announced in May alone, contributing to a total of 18,017 for the year. This figure indicates a notable increase of 235% when compared to the same period last year.
- Financial Firms: Financial firms have also experienced significant job cuts, with a total of 36,937 announced through May. This represents a substantial 320% increase compared to the same period in 2022.
Anticipating Economic Slowdown: Companies Slowing Down Hiring Processes
Andrew Challenger, a labor expert and Senior Vice President of Challenger, Gray & Christmas, shared his insights on the situation. He stated, “Consumer confidence is at its lowest point in six months, and job openings are showing signs of stagnation. Companies seem to be slowing down their hiring processes in anticipation of an economic slowdown.”
Cumulative Job Cuts Planned for the Year: 417,500 Jobs
The report also highlights the cumulative job cuts planned for the year. Companies have announced their intentions to eliminate a total of 417,500 jobs so far, reflecting a significant 315% increase compared to the same period last year when 100,694 cuts were announced. This figure is the highest recorded for the January-May period since 2020 when 1,414,828 job cuts were reported.
It is evident that the rise of AI technology is causing significant disruptions in the job market, with the technology industry being the most impacted. As companies continue to implement AI solutions, it is crucial for individuals to adapt and acquire the necessary skills to thrive in this evolving landscape.
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