In October, American companies announced they would cut 153,074 jobs, the highest number since 2003. These high figures are linked to the implementation of artificial intelligence (AI) and the need to cut costs.
According to Challenger, Gray & Christmas Inc., the number of layoffs at companies is almost three times higher than a year ago. Most of the layoffs were in technology, warehousing, and freight transportation, as companies increasingly automate their processes.
These organizations hired heavily during the pandemic, when demand was high due to many shopping online and spending time at home. However, now that demand has subsided, companies are realizing that AI-based tools are cheaper, so they no longer need as many employees.
A similar situation occurred in 2003, when companies were forced to reorganize their teams due to the advent of mobile phones and new digital tools. The motives in October are similar, but this time, artificial intelligence is developing and spreading faster.
Andy Challenger of Challenger, Gray & Christmas said companies are also laying off staff due to the global economic downturn. People and businesses are spending much less than they used to, and the costs of doing business have become so high that executives are forced to do everything they can to cut costs.
Tech giants have not been immune to this trend, with layoffs at Amazon, Meta, Target, and Paramount Skydance at record highs.