An interesting dynamic is currently emerging in the tech sector and beyond: AI is "sucking away" jobs in other areas.
SAP recently announced that it was cutting 8,000 jobs, only to add them back in the same year - in the field of artificial intelligence. Amazon, Duolingo, Vroom and other companies are doing much the same. They are laying off people somewhere in the company to create new jobs in the field of AI instead.
I recognize three exciting dynamics here.
- Firstly, and most intuitively, AI is king right now. Whether cloud provider, language learning app or used car marketplace, the adoption of artificial intelligence is intensifying in all kinds of industries. So jobs are being created there. OK, nothing new so far.
- Secondly, instead of simply creating new AI jobs, some companies are cutting jobs elsewhere. This wouldn't have happened in the past, when the jobs would simply have been added. The "what's going wrong in the economy" word salad since 2022 is hitting home: higher key interest rates, weak demand, uncertainty, etc. - Companies would rather cut (personnel) costs and increase profitability than let themselves go in terms of expansion. If a growth area emerges, savings have to be made elsewhere.
- Thirdly, it reminds me a bit of the "Dutch disease". A booming economic sector (traditionally oil or gas) attracts so much capital and skilled labor that the rest of the economy is left with hardly anything. As the booming sector also pushes up prices in the economy as a whole and strengthens the currency, the other sectors suffer all the more and gradually wither away. In the end, the economy is dependent on the boom sector. If it takes a downturn, it drags the whole country down with it.
I wonder whether the "zero-sum" prioritization of AI could be the same for some companies. Because if a concrete approach to an AI application turns out to be unsubstantiated hype at some point, the company that has cut back elsewhere suddenly finds itself in a bad position. Especially if it was valuable specialists who were made redundant and now desperately need to be brought back in.
We have not yet been able to observe this anywhere, but it is still too early for that. And in any case, this could only be a temporary phenomenon: If 2024 turns out to be a better economic year and key interest rates fall, companies will increase their staff again instead of engaging in "distribution wars".
How are things looking for you? Have you noticed more of a "distribution battle" in personnel policy than before?
