Concerned About AI Taking Away Jobs? Here are the Real Reasons Behind Layoffs

HSBC's report suggests that there are 4 macroeconomic factors playing a bigger role than AI in job displacement.

PUBLISHED MAR 25, 2024

Cover Image Source: Pexels | Ivan Samkov

The rise of AI has triggered a lot of hysteria about the technology taking away jobs from human beings at a time when layoffs aren't slowing down. The widespread popularity of ChatGPT towards the end of 2022 highlighted the growing popularity of AI, sparking a heated discussion about its potential impact on the workforce.

Cover Image Source: Getty Images | Leon Neal Staff — Image Source: Leon Neal Staff/Getty Images

But contrary to existing fears, a recent HSBC report suggests that technological developments like the growth of AI might not even be the primary factor contributing to job displacement in the future.

Major job loss trends

Based on data from the World Economic Forum's "Report on Jobs 2023," HSBC highlights that four main macroeconomic trends are predicted to cause job displacement. The primary factor anticipated by companies to lead to job losses is slower economic growth. In fact, the World Bank recently projected a significant decrease in global economic growth with expectations of 2.1% for 2023 compared to last year's 3.1%.

Image Source: : Pexels/Liza Summer — Image Source: : Liza Summer/Pexels

"The challenges are evident - due to the weakened economic growth and overall shortages in supply or demand, numerous firms anticipate operating with a reduced workforce," stated analysts at HSBC in their report. The challenges are common as weaker economic growth and shortages in supply or demand prompt many firms to anticipate operating with a reduced workforce. “But it’s important to remember that not all changes in the economy are expected to mean fewer workers,” the report also mentioned. For instance, companies expect the green transition and the adoption of Environmental, Social and Governance (ESG) standards to lead to an increase in job opportunities.

Increased adoption of new tech

Among the patterns foreseen by companies to result in job creation, the "increased adoption of new technologies" stands out and Artificial Intelligence (AI) is a significant part of this trend. According to data from the World Economic Forum, over 20% of companies expect AI to create jobs instead of replacing them. However, there are two tech-related factors that are likely to lead to roles becoming obsolete: the emergence of both humanoid and non-humanoid robots.

"While AI receives much of the current attention, it's essential to thoroughly consider the impact that a wide range of technologies could have on the labor market," remarked HSBC. Particularly, in the realm of technology, the impact of new developments may extend beyond merely replacing jobs. HSBC raised an important question about whether there will be an adequate number of workers with the right skills to fulfill these new requirements.

In addition to slower economic growth causing job losses, HSBC identified several other factors affecting businesses such as supply shortages and rising business costs. Consumers are also facing higher living expenses and the ongoing impacts of the Coronavirus pandemic.

Need for reskilling

In an evolving tech landscape, continuous learning, upskilling and reskilling are becoming essential for individuals to remain competitive and secure their career prospects. Analytical and creative thinking, resilience, flexibility and agility, motivation and self-awareness, curiosity, life-long learning and technological literacy are among the most in-demand skills in 2023, per WEF's "Future of Jobs Report 2023" report. Staying aware ad agile in the face of technological disruptions can hence help workers navigate potential job uncertainties and embrace the new opportunities that emerge.