NEW YORK/WASHINGTON
Major global firms are laying off tens of thousands of workers due to weak economic expectations, cost-cutting measures, and the widespread use of artificial intelligence (AI).
Despite economic uncertainty, many companies are increasing AI investments and downsizing corporate staff in order to replace workers with technology. Sluggish consumer demand, rising costs, and weak growth prospects all contribute to layoff decisions.
Many skilled workers and recent graduates face competitive pressure in the changing global labor market. Many companies in sectors such as retail, technology, and telecommunications are cutting jobs while more and more people are looking for work.
In October, 25,000 workers have been affected by layoffs in the US and over 20,000 in Europe.
UPS, a US-based shipper, announced this week that it will reduce its operations workforce by 34,000 employees in its third-quarter financial results. Around 14,000 workers, primarily in management positions, had already been laid off as part of an initiative to improve the company’s efficiency, bringing the total number of layoffs this year to 48,000.
Amazon, the US technology and e-commerce giant, announced approximately 14,000 corporate layoffs this week due to company-wide organizational changes. The layoffs were caused by the impact of artificial intelligence and the company’s transition to a more ownership-based organizational structure.
By the end of the summer, US chipmaker Intel had laid off 24,000 workers and canceled projects in Germany, Poland, and Costa Rica in order to reshape its production capacity to meet demand.
Swiss food and beverage firm Nestle has also announced that it will lay off 16,000 employees over the next two years to cut costs. Of these, 12,000 are white-collar workers, while the remaining 4,000 work in manufacturing and supply chain units.
Irish IT and consultancy firm Accenture decided to restructure to adapt AI into its operations and announced it will lay off 11,000 workers worldwide.
Novo Nordisk, a Danish pharmaceutical company, has announced that it will lay off 9,000 employees in order to restructure, with 5,000 of them expected to be based in the company’s Danish headquarters.
US automaker General Motors reportedly laid off over 1,700 workers at its Michigan and Ohio plants on Wednesday, while 1,200 workers were laid off at its electric vehicle (EV) plant in Detroit and 550 workers in its Ohio battery factory.
According to reports on Thursday, media company Paramount Skydance has begun layoffs with 1,000 employees. The total number of layoffs at Paramount is expected to reach 2,000 following the merger with Skydance in August, which prompted the company to restructure.
In July, US tech giant Microsoft announced that 4% of its workforce would be laid off. The company said its management layers would be reduced, and products and roles would be streamlined to improve efficiency. According to US media reports, these changes will result in approximately 9,000 layoffs.
British auditor PwC laid off 5,600 workers in the 12 months ending on June 30.
American software firm Salesforce said it will lay off 4,000 workers, according to the company CEO Marc Benioff, as he said on a podcast that the impact of AI means he needs fewer workers.
US retail giant Target said last week that it will lay off 1,800, marking the first in a decade. Target CEO Michael Fiddelke called it a necessary step in ensuring progress and growth.
American grocery store chain Kroger laid off around 1,000 corporate workers in August.
Chip industry provider Applied Materials announced last week that it is laying off 4% of its workforce, according to an internal memo, as the firm looks to automation and digitalization.
American tech giant Meta said last week that it is laying off 600 workers in its AI unit.
Meanwhile, the Fed is on the lookout.
The Fed cut its rate for the second time this year on Wednesday due to downside risks to employment.
Fed Chair Jerome Powell said a large number of firms froze hires or are laying off workers due to AI, which could impact job creation. This takes time to be reflected in data, which is why there has yet to be a surge in jobless claims.
