Major Companies Initiate Workforce Reductions Amid AI Adoption
Leading technology companies are increasingly replacing human employees with artificial intelligence (AI), a trend that raises significant concerns about the future of work. Notable firms such as HP Inc., IBM, and Amazon have announced plans to reduce their workforces as they implement AI-driven productivity measures.
In a recent earnings report, HP disclosed intentions to cut between 4,000 and 6,000 jobs by the end of 2028. This decision is part of a broader strategy to save approximately $1 billion by enhancing efficiency through AI. The company noted that these workforce reductions would help improve customer satisfaction and foster innovation.
IBM’s CEO, Arvind Krishna, indicated that the company has already replaced hundreds of human resources positions with AI. He stated that IBM is planning significant workforce cuts, affecting a “single-digit percentage” of its global workforce by the fourth quarter of 2025. Krishna emphasized that while the company is reducing roles in areas that can be automated, it is simultaneously shifting its focus towards hiring in AI and quantum technologies.
In a recent earnings call, Amazon CEO Andy Jassy addressed the company’s decision to lay off 14,000 employees. Although Jassy claimed that the layoffs were not primarily driven by AI, he acknowledged that efficiency gains from AI would impact the workforce in the coming years. He described the layoffs as a cultural shift rather than a financial necessity, stating that the company aims to operate “like the world’s largest startup.”
Salesforce is also adapting its workforce strategy in light of AI advancements. CEO Marc Benioff revealed that the company has utilized AI agents in its customer support division, leading to a reduction in staff from 9,000 to 5,000. A spokesperson clarified that the restructuring was an organizational transformation allowing for the redeployment of hundreds of employees into other areas of the company.
In the financial technology sector, Klarna is experiencing similar changes. CEO Sebastian Siemiatkowski indicated that the company could effectively operate with half its current workforce due to the efficiency of its AI assistant. This transition has reportedly saved the company around $58 million annually.
Additionally, Fiverr, an online freelancing platform, is implementing workforce reductions as it repositions itself as an “AI-first company.” CEO Micha Kaufman announced plans to cut around 30% of its workforce, impacting approximately 250 employees. Kaufman has expressed a clear commitment to hiring individuals proficient in AI technologies moving forward.
Concerns regarding job displacement due to AI have escalated in recent years. A study from the Massachusetts Institute of Technology (MIT) found that AI could potentially replace 11.7% of the U.S. labor market. The research utilized a labor simulation tool called the Iceberg Index, analyzing the skills overlap between AI and various occupations across 151 million U.S. workers.
While many companies are replacing human workers with AI, a survey conducted by the World Economic Forum suggests that 41% of organizations anticipate workforce reductions in the next five years as a direct result of AI adoption. Conversely, tech jobs in areas such as big data and fintech are projected to double by 2030, indicating a potential shift in the nature of employment rather than an outright elimination of jobs.
As the conversation around AI and employment continues to evolve, it is clear that companies are navigating a complex landscape where the balance between technological advancement and human employment remains uncertain.
