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Alexis Madrigal: Welcome to Forum. I’m Alexis Madrigal. Layoffs are never easy — take it from us, journalists who have watched our industry more or less collapse over the last twenty-five years — but it seems like something is different in this era of layoffs. Is it the scent of AI in the air? Is it an even more entrenched ageism? Is it just an economy that’s wildly, and ever more, unequal?
Here to discuss the new world of getting laid off, we’re joined by Aki Ito, chief correspondent at Business Insider. Her recent piece is titled Amazon Just Kicked Off the New Era of Giant AI Layoffs. Welcome.
Aki Ito: Hi. Thanks for having me.
Alexis Madrigal: We’re also joined by Noam Scheiber, who is a reporter at The New York Times covering the white-collar workforce. His forthcoming book is titled Mutiny: The Rise and Revolt of the College Educated Working Class. Welcome. I think he’s there. We’ll move on.
Alisia Gill also joins us. She’s an executive coach and founder of Era of Enough, a coaching firm that works with mid-career professionals, especially women. Thanks so much for joining us, Alisia.
Alisia Gill: Thank you.
Alexis Madrigal: So, Noam, there have been a series of layoff announcements from companies across industries. Can you give us a snapshot of how many white-collar workers have been affected this year?
Noam Scheiber: Yeah. So we’re flying a little blind because of the government shutdown — we didn’t get the October unemployment report, which we would normally have by now. But we can say from private consulting firms that layoffs are definitely up this year.
Challenger, Gray & Christmas, a private-sector recruiting and staffing firm, reports that layoffs were about 150,000 in October, which is up pretty dramatically from both September and the previous October. For the year, through the first ten months, we’ve been over a million. And at the same point last year, it was about two-thirds of that. So clearly, layoffs are up.
Obviously, we’ve been through other periods where there were even more widespread layoffs — during the pandemic shutdown, during the Great Recession. But I think what’s alarming about these recent layoffs is that it’s happening at a time when the overall economy still looks pretty solid. The unemployment rate is still in the low four-percent range. We see the stock market booming. The macro indicators — other than these layoffs — look pretty good. So I think a lot of economists are scratching their heads about why we’re getting indicators trending in the wrong direction even as the overall economy looks okay.
Alexis Madrigal: So interesting. Aki, how about here in the Bay Area? What are some companies that have announced layoffs, and what’s the scope?
Aki Ito: Yeah. I mean, the big one is really Amazon. I was shocked when the announcement came out a few weeks ago. And I think what’s really different about what Amazon did is that we’ve been in this extraordinary white-collar recession for the last three years that the tech industry kicked off.
Initially, they said it was because they overhired during the pandemic — so they were just working through the excesses. They also said they created too many layers of management in the middle, that they’d become too bureaucratic. But it’s really only in the last few months that companies are saying, “We’re also doing layoffs because of AI.” And there’s something about that that feels permanent.
Maybe these companies are too optimistic about what AI can already do and what it will be able to do in the next few years when it comes to replacing white-collar workers. But it’s also possible that they’re right — and we’re going to end up seeing a permanent shrinking of the white-collar class. And I think that’s what feels so scary about the era we’ve just entered.
Alexis Madrigal: Noam, do you buy the “AI is causing this” argument? I feel like there are components on both sides.
Noam Scheiber: Yep. I think that’s an element. I would say a couple things.
One is that this slowdown in demand for white-collar workers goes back more than fifteen years — even a couple of years before the Great Recession. We saw the demand for certain white-collar workers slow down, then take a huge hit during the Great Recession. And that market never really got back on track. It was starting to mend in 2019, and then the pandemic hit. The past few years have been a really tough labor market for white-collar workers.
And that has to do with longer-term shifts — some tech-related — that long predate generative AI. We have other AI applications, like machine learning, that have gradually taken a bite out of demand for white-collar workers: people doing back-office work, clerical work, accounting, financial advising. These tasks have been made easier by tech going back a decade or two. So I think this is much deeper and further-reaching than the past few years.
As for the post–Gen-AI, ChatGPT era, I think we’re seeing some signs that it’s affecting recent college grads. Erik Brynjolfsson, an economist at Stanford who follows this, has had researchers in his lab dig into the data by experience level and job category. And we do see some reduction in demand for entry-level software developers. But it’s still pretty isolated.
What we are seeing in big companies — Amazon, Alphabet, Meta — is general belt-tightening so they can free up money to spend on AI infrastructure. Spending on chips and data centers is enormously expensive. So as these companies reroute spending from labor to infrastructure, layoffs make sense. So I think that’s what we’re seeing now: more of an overall, indirect effect of AI. It could easily become direct substitution going forward, but right now it’s the early stages.
Alexis Madrigal: It’s just so weird, Aki — it feels like these are almost aspirational layoffs. Like companies want to say, “Yes, we’re laying people off because our AI investments are working,” rather than because they truly need to. It’s strange.
Aki Ito: Yeah. Aspirational — yeah.
Alexis Madrigal: And in the past, I would have read layoffs as a bad sign for a company. But now companies are trying to reverse that: “We’re doing better — that’s why we’re laying people off,” instead of, “We’re losing money.”
Aki Ito: Yeah. There’s an extraordinary amount of pressure on companies to do these layoffs. It’s almost like, if you’re not cutting 10,000 workers, what are you even doing? Amazon kicked this off — and now that pressure is on all the other big tech companies.
Alexis Madrigal: We’ve been talking about the company perspective. Alisia Gill, from your perspective as someone who works with people who are out there looking for jobs, how are they reading this job market and the possible role of AI?
Alisia Gill: A lot of people are in a state of shock. There’s a cognitive dissonance: you look at the unemployment rate of 4.3 percent, and then you see yourself and people around you dropping like flies — senior VPs, market executives, all of that. We thought that if we worked hard, we’d keep our jobs. We were the ones who weren’t supposed to get laid off. So it’s creating a bit of an identity crisis.
People ask, “Is it me? How is it 4.3 percent unemployment and I’m out of a job?” And also, “What am I going to do?” This is not what we were promised. Many mid-career folks have been working fifteen to twenty years. They worked hard. They got promoted. Maybe weren’t paid enough — especially women — but we were told, “If you just work hard, deliver, show loyalty…”
Alexis Madrigal: Get a college degree, get a graduate degree…
Alisia Gill: Right. Get the right one. Major in the right thing. Your parents were right for not letting you major in art. So you got your law degree — and now you’re on the chopping block even though you did everything “right.” The social contract we were raised with isn’t there. There’s sadness, anger, confusion. People realize we’re in uncharted territory.
Add AI to that — and even without AI, how do you get a job now? If you’ve been at a senior level, you got jobs because recruiters called you. Colleagues brought you along. It wasn’t a thing. And now? “What’s happening with applicant-tracking systems? What do you mean I need to update my LinkedIn profile? What is a LinkedIn profile?”
Alexis Madrigal: Hopefully people know what a LinkedIn pro— yeah.
Alisia Gill: You’d be surprised. Yeah. You’d be surprised.
Alexis Madrigal: If you’ve been in one place twenty years, you haven’t been job-hunting — it’s a whole new world out there.
We’re talking about layoffs affecting white-collar workers. This year alone, more than 150,000 white-collar employees have been laid off from companies like Amazon, Target, and GM. We’re joined by Alisia Gill, an executive coach and founder of Era of Enough; Noam Scheiber of The New York Times; and Aki Ito of Business Insider.
Have you recently been laid off? How has your job search been going? Does it feel different from the last time you were in the job market? Give us a call: 866-733-6786. That’s 866-733-6786. Or email us — Forum@kqed.org. You can also find us on social media: Bluesky, Instagram, Discord. We’re KQED Forum.
A couple stories already came in. Anne writes: “I was laid off in February from ServiceNow. I’m an experienced engineering manager with two degrees, and I’ve never felt less hireable. With every tech-layoff announcement, I become less confident I’ll ever find a job, especially as the market floods with people like me, all vying for the same six jobs. Oh, what I’d give for a 2015 hiring market again.”
Does that resonate with you? Call us or send us an email. Forum@kqed.org.
I’m Alexis Madrigal. Stay tuned.
