In June, the United States saw a decrease in job cuts compared to previous months, largely due to technology companies maintaining their workforce. According to Challenger, Gray & Christmas, just over 40,000 layoffs were reported, which is higher than the past two years but a 49 percent decrease from May. The technology industry accounted for 4,685 job cuts, the lowest number since October. Surprisingly, only seven of these job cuts were justified by “artificial intelligence,” a significant drop from the 3,900 reported in the previous five months.
There are several factors contributing to the decline in job cuts in the technology and IT industry. The decrease in demand for digital services after the COVID-19 pandemic and the unfavorable financial market conditions led to extensive cost-cutting measures. Additionally, the stock prices of major IT companies plummeted. Though artificial intelligence has shown potential as a growth area, its positive impact on the US labor market is yet to be reflected in the numbers. However, experts believe that the IT industry’s reign at the top of job cut lists may be coming to an end soon.
Another interesting finding from the Challenger Report for June is the table showcasing specific reasons for job cuts. The inclusion of “Artificial Intelligence” as a justification has raised eyebrows. While over 3,900 jobs were attributed to AI in May, the number dropped to just seven in June. This raises doubts about the predicted transformation of the workforce due to technologies like ChatGPT. It should also impact various sectors that were previously considered immune to automation.
