AI is already associated with layoffs in the industry it created



Many have raised concerns that artificial intelligence could displace jobs in the coming years, but it’s wreaking havoc in one industry where workers once seemed invincible: tech.

As Silicon Valley races to keep up with the rapid growth in technology being built in its own backyard, a small but growing number of tech companies are citing AI as a reason.

Chegg said in a regulatory filing last month that the education technology company is cutting 4 percent of its workforce, or about 80 employees, “as the company works to execute against its AI strategy and create long-term sustainable value.” For the students and investors.

IBM CEO Arvind Krishna said in an interview with Bloomberg in May that the company expects to pause hiring for roles it believes could be replaced by AI in the coming years. (In a subsequent interview with Barron’s, however, Krishna emphasized that he felt his earlier comments were taken out of context, and that “AI is going to create more jobs than it’s taking on.”)

And in late April, file storage service Dropbox said it was cutting 16% of its workforce, or about 500 people, also citing AI.

In its latest layoffs report, housing firm Challenger, Gray and Christmas said 3,900 people were laid off due to the IIA in May, marking the first time job cuts have been made as a result. All of these cuts occurred in the technology sector, the firm said.

With these moves, Silicon Valley is not only leading the charge in advancing AI, but can also provide an early look at how businesses can adapt to the tools. Rather than making entire skill sets obsolete overnight, as some fear, the rapid impact of the new crop of AI tools appears to be forcing companies to shift resources to better use the technology — and putting a premium on workers with AI skills.

“In the past few months, AI has captured the world’s collective imagination, expanding our next generation of AI-powered products faster than we could have imagined,” Dropbox CEO Drew Houston wrote in a memo to employees. The work will be reduced. “Our next level of growth will require diverse skill sets, particularly in AI and early stage product development.”

Asked to comment on how the fix around AI is playing out, Dropbox directed CNN to its careers page, where it says it’s currently hiring for several roles focused on “new AI initiatives.”

Dan Wang, a professor at Columbia Business School, told CNN that AI is “reshaping organizations,” but he doesn’t see machines replacing humans just yet.

“AI, as far as I can see, will not necessarily replace humans, but rather enhance human work,” Wang said. “I think the type of competition that we should all be thinking about is that human specialists will be replaced by human specialists who can use AI tools.”

The AI-driven tech layoffs come amid broader cuts across the industry. More than three years into the pandemic, many tech companies have been reeling from an uncertain economic environment and declining demand for digital services.

According to data tracked by, 212,294 tech industry workers will be laid off in 2023 alone, up from 164,709 in 2022.

But in the shadow of those mass layoffs, the tech industry has been caught up in AI enthusiasm and has invested heavily in AI talent and technology.

In January, just days after Microsoft announced plans to lay off 10,000 employees as part of sweeping cost-cutting measures, the company confirmed it was making a “multibillion-dollar” investment in the open AI behind ChatGPT. And in March, in a similar letter to employees, Mark Zuckerberg announced plans to lay off another 10,000 workers (after cutting 11,000 positions last November), while the Meta CEO outlined plans to invest heavily in AI.

Even software engineers in Silicon Valley, who once seemed to be a special interest, now seem to be losing their jobs or losing wages to those with more AI expertise.

So does startup founder Roger Lee, who has been tracking tech industry layoffs through the website examines job listings and compensation information at some 3,000 tech companies.

Lee told CNN that a recent analysis of data from showed that the average salary of a senior software engineer specializing in artificial intelligence or machine learning is 12% higher. Datapoint calls it an “AI premium” over non-specialists in that area. The average salary for a software engineer specializing in AI or machine learning has increased 4 percent since the start of the year, but overall salaries for top software engineers have remained flat, he said.

Lee cited Dropbox as an example of a company that offers particularly high pay for AI roles, citing a salary range of $276,300 to $373,800 for a chief machine learning engineer role. (By comparison, data puts the average salary of a senior software engineer at $171,895.)

Those looking to thrive in the tech industry and beyond may need to brush up on their AI skills.

Wang, a professor at Columbia Business School, told CNN that he began familiarizing his students with the newest generative AI tools on the market last spring semester. “I think that kind of exposure is very important to prepare themselves for success once they graduate,” Wang said.

Not everyone needs to be AI specialists, Wang added, but instead, employees need to know how to use AI tools to be more effective in whatever they do.

“That’s where the talent battlefield is changing, as the difference in talent comes from creative and effective ways to integrate AI into everyday tasks,” Wang said.


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