Recent layoffs have been attributed to AI. Is that reality?

Layoffs are making big headlines again. Amazon, Dow, UPS, and Pinterest have all announced job cuts in the last week. Several cited artificial intelligence as one of the reasons.

But what does it really mean when companies say they’re letting people go because of AI? Is AI actually replacing those human workers? Do companies want more money to invest in developing the technology? Or do they just think it sounds good to investors?

Every time Molly Kinder, senior fellow at the Brookings Institution, hears a company attribute layoffs to AI, she’s skeptical.

“Our best labor market data show that we’re really actually not seeing much of an impact on the labor force,” she said.

There’s no real proof, she said, that the much talked about and feared “AI apocalypse” is here.

“It’s certainly true that some companies have to invest a lot of capital in the infrastructure behind AI… Which has, in some cases, forced them to cut costs in other areas,” Kinder said.

That’s not the same thing as AI being good enough to take people’s jobs, though. But Sarah Myers West, co-executive director at the AI Now Institute, said pinning layoffs on AI sounds good to investors.

“I think it’s a way for companies to look like they’re being really innovative while sort of stepping back over-investment, or they need to trim their books, or there might be a variety of other reasons why they need to make layoffs,” she said.

None of those reasons seem quite as positive for investors as AI.

Lawrence Schmidt, an associate professor of finance at the Massachusetts Institute of Technology’s Sloan School of Management said there are some jobs AI can do.

“But, in many instances, it will change what we are doing rather than eliminate the job entirely,” he said.

In the short term, Kinder said we’re probably overestimating how many jobs are vulnerable to AI.

“But we’re probably underestimating how transformative it will be in the medium to long term,” she said. “When I look out five to 10 years, I think we’re going to be seeing a lot more impact on jobs.”

And she said we need to be doing more to prepare for that.