Behind the Curtain: How an AI job apocalypse unfolds
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Illustration: Sarah Grillo/Axios
One of the most important real-time, real-world debates in America is whether AI causes a short-term job apocalypse among white-collar workers.
- Two developments unfolding this week show urgent reasons for acute concern:
- Amazon announced yesterday that it's cutting 14,000 white-collar jobs. JPMorgan, Walmart and others have revealed plans to slow hiring. All cited AI. PwC, the accounting and consulting giant, cut staff globally, partly because of AI. Nestlé cut jobs, blaming automation.
- As importantly, a 2-year-old company with a 22-year-old CEO, founded by three college dropouts, was just valued at $10 billion, according to The Wall Street Journal. The San Francisco company, Mercor, pays doctors, lawyers and others to train AI so machines can perform like human professionals. This is part of a mad rush to fine-tune AI with true human expertise so it can do for free what junior employees do now — and, later, what senior ones get paid good salaries to do.
Why it matters: All of this amplifies publicly what we keep hearing from CEOs privately. Almost every company is planning to slow hiring in the short term, and operate with much smaller human workforces in the future.
Yes, new technologies usually result in a net increase in labor and wealth over time. But the transition is often painful.
- That's why Anthropic CEO Dario Amodei told us that LLMs, like his Claude, could wipe out half of all entry-level white-collar jobs.
- Ford CEO Jim Farley warned this summer that AI will replace "literally half" of white-collar jobs.
Don't get distracted by record stock prices. (The S&P 500, Dow and Nasdaq all hit new highs yesterday for the third session running.) The surging companies are all benefiting from AI for a simple reason: Companies expect more powerful AI, more productivity, greater profits and fewer workers. The market can easily surge even if joblessness spikes.
- So listen closely when companies announce big plans for smaller workforces. And pay attention to Mercor, or the revelation that OpenAI is hiring former investment bankers to help train machines to do analysis better than humans.
- In the short term, that means fewer jobs.
The bottom line: AI is coming. CEOs know it, and the academics who understand the labor market best know it, Axios managing editor Ben Berkowitz points out.
- The question is whether workers themselves are paying attention.
💡 News you can use: Microsoft released a detailed report this summer on specific tasks and jobs most at risk to AI — a useful guide to what might lie ahead for your job or specific tasks. See our list of the 10 most-threatened (interpreters and translators) and least-vulnerable (dredge operators) jobs.
