M.Microsoft became the latest major technology company to announce major layoffs on Wednesday. About 5% of the company’s workforce, or 10,000 of his jobs, will be cut, CEO Satya Nadella announced in a memo to employees published online.
In explaining the decision, Nadella pointed to the impact of global economic conflicts, post-pandemic changes in habits and, perhaps most notably, the rapid development of artificial intelligence.Microsoft is a major investor in OpenAI. is. ChatGPT, OpenAI’s chatbot, has excited and terrified the world over the past two months with its ability to respond clearly and intricately to written prompts. “The next big wave of computing is coming with advances in AI. We are transforming the world’s most advanced models into a new computing platform,” he wrote.
This line of Nadella’s statement stoked long-standing concerns about AI’s potential to replace many human jobs. “Microsoft throws 10,000 workers onto the streets to employ artificial labor.” I wrote one comment on Twitter.
But layoffs at Microsoft and other tech companies have more to do with the current economic climate than recent AI breakthroughs, experts argue. The rise of artificial intelligence may still have a significant impact on the workforce, but blaming technology for this wave of layoffs is largely misguided.
“If you go back 200 years, there was a wave of fear about automation. People see new technology and fear it will completely replace human labor.” Automation and the future of work says a professor at Syracuse University. “And so far, all predictions have been proven wrong.”
Tech layoffs have been happening rapidly and furiously over the past few months. Meta said he cut 11,000 in November. Amazon announced he will lay off 18,000 people in January. Salesforce announced another 8,000.
These contractions may first be related to pandemic-era expansion of technology. Demand for online services has skyrocketed as people spend more time at home computers. As a result, the tech company grew rapidly and made record profits. Microsoft is one of the beneficiaries, with profits skyrocketing in 2021. Between June 2021 and his 2022, they have hired a record 40,000 employees.
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But last year, the economic headwinds changed. First, habits changed as people reentered public spaces, making home technology services less important. “There was an idea that the pandemic would cause these kinds of permanent behavioral changes, such as everyone working from home and not going to the store or the cinema. did,” he says Benanav.
Russia’s invasion of Ukraine jeopardized supply chains and pushed up prices, while fiscal policy and economic stimulus created cheap currency around the world and fueled inflation. To keep inflation in check, the Federal Reserve began raising interest rates in hopes that consumers would cut back on spending, resulting in lower demand and prices for commodities.
The impact on the tech industry has been particularly severe, with more than 150,000 tech workers laid off in 2022, according to tracker Layoffs.fyi. Microsoft is he one of those companies. While Microsoft relies less on advertising dollars than competitors such as Google and Meta (the sector plummeted last year), the company’s cloud services and hardware divisions continue to suffer. While many people bought laptops to work from home early in the pandemic, PC sales have plummeted in 2022. Microsoft’s stock has fallen 22% since he was a year old.
“When interest rates were so low, companies basically had unlimited money. Investors were telling us to focus on growth, not profitability,” says Benanav. “But with interest rates going up, there’s a shift away from big investors saying, ‘No, we really need to focus on profitability right now.’ The way is cut.”
In December, the Federal Reserve raised interest rates again, signaling its intention to continue doing so in 2023. This indicates that the economic outlook for companies like Microsoft is unlikely to improve. The company is due to announce its quarterly results next Tuesday.
In an open letter, Nadella wrote that Microsoft will retire roles in some areas and continue hiring in others. AI is likely to fall into the latter category. Like many other technology companies, Microsoft has invested heavily in AI, driven by the belief that AI’s capabilities will increase efficiency in all areas. Earlier this month, Semafor reported that Microsoft hopes to invest another $10 billion in OpenAI.
ChatGPT does not yet have a business model for OpenAI or Microsoft revenue. But a deal like this puts Microsoft at the forefront of AI technology and all its improvements. This could help Microsoft’s search engine Bing (which currently lags far behind Google) and Microsoft’s cloud business, which lags behind Amazon Web Services.
In an interview at the 2023 World Economic Forum this week, Nadella said Microsoft plans to build AI into all of its products. He also claimed that workers would be more efficient and productive when paired with his AI.
While it’s true that some jobs could be wiped out by AI, some prognosticators believe that many more will be added. Last year, the World Economic Forum predicted that AI will replace 85 million jobs and create 97 million new jobs by 2025.
Kevin Kelly, Founding Editor-in-Chief Wiredrecently wrote an article arguing that technology has a long history of augmenting human work rather than replacing it. He pointed to the panic that many feared. However, historian Hans Rooseboom was able to locate a lone portraitist of the time who felt photography led to his unemployment.
Some argue that jobs can be found in AI, especially data science and machine learning. However, some of these new jobs are of poor quality and even dangerous. A TIME study found that OpenAI used outsourced Kenyan workers earning less than $2 an hour to review toxic content such as sexual abuse, hate speech, and violence. All four of his employees interviewed by TIME said the job had hurt them.
read more: OpenAI made ChatGPT less toxic using Kenyan workers for less than $2 an hour
The Partnership on AI, a coalition of AI organizations to which OpenAI belongs, said, “Despite the fundamental role played by these data enrichment professionals, the precarious working conditions these workers face are More research is revealing. “This may be the result of trying to hide the reliance of AI on this large workforce when praising technology’s efficiency gains.”
“The potential demand for working with current AI technologies is huge,” says Benanav. “There are all these claims about how much software and programs can do automatically. It’s about checking what AI produces, dealing with all the problems AI produces, and much of that work is outsourced to low-wage workers in countries around the world.”
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