AI has not yet replaced actual jobs at scale. It is potentially a cover for cost cutting but might well lead to mass layoffs in the future.

Headlines scream about AI displacing jobs for entry level software engineers. To investigate what lies behind the headlines, I asked a couple of anonymous senior managers in technology firms and a distinguished engineering professor, Garud Iyengar, of Columbia University: is AI responsible for these layoffs? Or is it plain old-supply imbalances caused by other factors?

I deliberately wanted to chat with people on the demand and supply side of the equation. Technologists close to AI tend to almost involuntarily hype demand for the tools they have invested their lifetime studying (Garud is a rare technologist who is pragmatic and balanced). Business executives, at least some, are less swayed by the hype and more level-headed about the costs and benefits of using AI.

The conversation uncovered several nuances that are often missing in press stories.

Tech over-hired during the pandemic

The senior managers suggest that lack of coordination among various divisions, during COVID, led to siloed engineering teams performing the same tasks in a conglomerate. As the dust settled from the pandemic, senior managers took stock of the work being done and realized that several teams performed overlapping tasks that could be consolidated.

Garud counters that these trends are concurrent: “while pandemic over-hiring is real, AI has significantly accelerated redundancy in many tech roles. Tools like GitHub, Copilot and automated code generation platforms have reduced the need for large teams of developers doing routine tasks. The CTO (chief technology officer) of Infosys, an Indian giant, claims that they see a 30% reduction of entry level coders. In the past, overlapping teams might have coexisted, but AI now enables leaner teams to maintain or improve productivity, creating a clear economic incentive to lay off.

But the redundancies would have led to layoffs, regardless of AI. Blaming AI shifts responsibility away from poor strategic planning and mismanagement. It's easier for a CEO to say “AI is replacing jobs” than to admit: “we miscalculated our growth trajectory.””

Read the full article here.