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AI Cited in Most Job Cuts for Second Straight Month as Companies Report Major Productivity Gains
Challenger, Gray & Christmas reported AI was the leading cause of layoffs in April, the second consecutive month it held that position. More than 49,000 job cuts this year have been linked to AI. Companies including Block, Coinbase and Cloudflare cited efficiency gains from the technology as they reduced staff.
May 10, 3:00 AM·2m read1 source
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AI was the top reason companies cited for job cuts in April for the second consecutive month, according to Challenger, Gray & Christmas. The outplacement firm said AI has been cited in more than 49,000 job cuts so far this year. Block laid off 40 percent of its staff this year after determining that AI allowed it to do more with smaller teams.
Coinbase is reducing its staff by about 14 percent. Its CEO said Tuesday that AI is enabling engineers to ship in days what used to take a team weeks. Cloudflare reported its AI use has increased by more than 600 percent in the last three months.
The company said the way it operates has completely changed as a result. Microsoft surveyed 20,000 workers using AI across 10 countries and released a report about how AI is changing jobs last week. "The anxiety around AI at work is real—from fears of job loss to the pressure to keep up with rapidly evolving technology," Microsoft wrote in the report.
Most companies have not yet adjusted employee metrics and incentives to fit with how AI is changing work, the survey found. Alexis Krivkovich, a senior partner at McKinsey & Company who helps lead the company’s People and Organizational Performance Practice, said it is very few jobs that are actually entirely automated away by current AI technology.
AI is technically capable of automating 57 percent of work-related activities, according to McKinsey & Company research cited by Krivkovich.
That capability is spread across pieces and parts of various jobs rather than replacing entire positions. Nitin Seth, the cofounder of digital services and consulting firm Incedo, said his company helps clients boost productivity using AI by at least 20 percent to 25 percent without reducing staff at the same scale.
