This is the script of my national radio report yesterday discussing massive layoffs in the U.S. and the possible role of #AI in those layoffs. As always, there may have been minor wording variations from this script as I presented this report live on air.
- - -
Yeah, this is quite a story, a quite depressing story. October layoffs were the worst for the month in 22 years and this makes 2025 the worst year for announced layoffs since back in 2009. Layoffs for October were reportedly over 150 thousand, with a lot of that in tech and significant amounts in other sectors too.
And this understandably is triggering considerable concerns about impacts on the economy overall and where things are heading. There's a lot of speculation about what is behind all these layoffs and there are a number of factors to choose from, and probably the reality is that it's a mix of these. There are concerns that the recent budget bill changed some key factors especially for large businesses (but for smaller ones too) that have abruptly changed their planning and so triggering these layoffs.
Tied to this is another factor, which of course is the tariff situation. This isn't only the actual tariff amounts these U.S. firms have to pay to our federal government now for imports of products including materials they import for products they manufacture here or partly or wholly overseas and for other raw materials. But also because since there have been so many sudden and drastic changes in the tariff rates and countries, many U.S. companies are saying they just can't plan for the future effectively right now and can't afford to keep many employees on their payrolls.
There are suggestions that some firms are shedding employees they hired related to the aftermath of the COVID epidemic.
And then there's the proverbial elephant in the room of AI, artificial intelligence. And this opens up a nasty can of worms. There are conflicting views of how much of the current layoffs should be attributed to AI, and there are suspicions in some quarters that some statements from some firms about this may not be as reliable as might be wished.
For example, Amazon initially said that their new layoffs were related to AI taking over what were people jobs, but then quite quickly changed their public statements on this to say AI wasn't really involved. So, yeah, those kinds of what seem like contradictions don't exactly provide a lot of confidence.
In any case, we do know that in the recent past there have been many layoffs clearly related to AI, and in some cases that didn't work out very well and firms found themselves having to rehire at least some of their humans because, as we know, so much AI is awful slop. But even then humans being hired back may be paid lower wages or the work may be farmed out to overseas workers who can be paid even less and don't run into the expenses of hiring H1-B workers and such.
One thing seems pretty clear -- the entire employment structure of the U.S. appears to have entered a period of major instability, largely driven by economic and technical forces (like global tariffs imposed by the U.S. on U.S. firms, and Big Tech billionaire CEOs pushing out their AI systems irrespective of how much damage that may do along an array of different vectors ultimately affecting pretty much everyone.
It seems unwise to try make any kind of precise predictions on where this will end up in the short term much less the longer term -- the markets may already be starting to sour on the grandiose AI promises that many observers feel have driven up values there in ways that may be unsustainable.
The general sense seems to be that given what we're seeing now, it's at least logical to anticipate that things may get worse in the labor market, perhaps much worse, before we can anticipate the possibility of significant turnarounds. But nobody really knows, and it may well be like riding a roller coaster in the dark. That may be fun at a theme park, but not so much with the economy. So to paraphrase that favorite old movie line: Buckle up, it's probably going to be a bumpy economic ride.
- - -
L