RedBalloon.work CEO Andrew Crapuchets talks to Fox News Digital about the February jobs report and how artificial intelligence is destroying jobs while increasing productivity.
February’s jobs report revealed 92,000 jobs lost, but Red Balloon CEO Andrew Klapshetz says the real economic corruption lies not just in the numbers but in the technology.
Krapchetz warned that invisible layoffs are occurring as artificial intelligence algorithms effectively remove qualified American workers from the applicant pool, creating a deep disconnect that he says is accelerating the unemployment rate’s spike to 4.4% and short-term economic “pain.”
“AI is causing major disruption in the job market right now,” Klapchez told FOX News Digital. ”[Companies] The effective use of AI has increased employee productivity. One of the ways AI works is by significantly increasing employee productivity. Companies don’t need to hire people right away. If you don’t, you will be fired. And that will only cause significant disruption to the market. ”
“Overall, it’s still a very disappointing number. We always expect the employment numbers to increase.” “But there are a variety of factors that are driving this. It’s not just the headlines that we’re seeing.”
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The Labor Department reported Friday that employers cut 92,000 jobs in February. That figure was well below the expectations of economists surveyed by LSEG, who expected the economy to add 59,000 jobs. The unemployment rate was 4.4%, slightly higher than the 4.3% expected by economists.
Two men attend a job fair in Culver City, California. (Getty Images)
Government payrolls, manufacturing, information, construction, transportation, warehousing, and even medical employment due to strike activity have shrunk significantly.
“What’s happening is that job seekers are using AI to perfect their resumes and cover letters, apply to maybe 100 jobs a day, and then spit those resumes out into the marketplace,” Klapczets explained. “So what? AI prefers AI-written resumes. And the problem is, when AI-written resumes come to the top and you bring those people in for interviews, you end up finding out… the perfect resume and the perfect employee are not the same thing.”
“AI is good at doing boring tasks, but actually having wisdom about a particular person clearly has to be a human activity,” he continued. “Most of the HR technology today is moving everything to AI, and that’s causing such havoc. So it’s becoming harder and harder for people to find jobs, because basically what’s happening is you’re taking a very complex human being and reducing it to a piece of paper called a resume, and AI is making decisions based on that.”
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Crapuchettes credits RedBalloon with allowing his team to produce three times as much work without hiring an extra person, thanks to AI. This is a microscopic observation of macroeconomic changes.
“We’ve basically tripled our engineering department without increasing headcount because we’re using AI effectively. That’s good, but in the short term, those are…a bunch of engineers that weren’t hired by Red Balloon because they were using AI effectively,” he said.
The BLS data also showed federal employment is down 330,000 jobs, or 11%, from its October 2024 peak. Klapchetz characterizes this as a “handcuff” that will be removed from the private sector, which he says has historically struggled to compete with government benefits.
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“I know from talking to employers over the past few years that they’ve always felt like they’re competing with the federal and state governments for talent…because it’s their money that they’re putting into government, and they’re hiring the talent that they really need to grow their business,” the CEO said.
“It will be a short-term pain because we will lose all our government jobs,” he reiterated. “They will lose that income, but I think their entry into the private sector will create economic activity that will be very beneficial to the United States in the long run.”
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His best advice for American workers facing a tight job market is to stay “AI-enabled,” arguing that even construction workers and truck drivers need to embrace AI as a tool to stay relevant.
“I hate to jump on the AI bandwagon, but the reality is that the most common thing that every job, every department at RedBalloon, is looking for right now is an AI-enabled employee. So employers are looking for people who aren’t afraid to understand how to use AI to do their jobs more effectively and efficiently. And obviously that feels weird… Well, the reality is that technology is enabling increased productivity in these areas.”
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FOX Business’ Eric Revell contributed to this report.
