The AI-Driven Job Crisis Has Already Arrived

Popular language learning platform Duolingo 148 new courses created with generative AI and announced the replacement of contractors with machine learning technology with the goal of becoming an “AI-first” company.

“It took us about 12 years to develop our first 100 courses, and now were able to create and launch almost 150 new courses in about a year. This is a great example of how generative AI can directly benefit our learners,” said Duolingo co-founder and CEO Luis von Ahn.

Journalist Brian Merchant that the shift to AI isnt really a new policy for Duolingo. The company laid off about 10 percent of its contractors at the end of 2023, and another series of layoffs took place in October 2024, a former employee said. In both cases, workers were replaced by artificial intelligence.

Merchant also pointed to by The Atlantic about the unusually high unemployment rate among recent college graduates. Presumably, companies are applying AI instead of white-collar jobs.

Total unemployment minus unemployment among recent graduates. Source: The Atlantic.

“Almost every professional artist or illustrator I meet tells me that they have lost clients and jobs because of firms that have decided to turn to artificial intelligence instead of paying for human labor. Some have been forced out of their fields altogether,” Merchant emphasized.

The crisis has arisen because of a series of management decisions made by executives seeking to cut payroll costs and consolidate control in their organizations, the journalist noted. This is evident in attrition in the creative industries, declining incomes for freelance artists, writers and illustrators, and the tendency of corporations to simply hire fewer workers.

“The AI jobs crisis is not some SkyNet-style robot apocalypse, but the layoff of tens of thousands of federal employees waving the banner of the first AI strategy,” the expert added.

Layoffs

According to layoff tracking site , 121 tech companies will lay off 52,305 employees in 2025. Including Google, Meta, Microsoft, Intel and other firms have announced job cuts to streamline and automate their operations. By comparison:

• In 2024, 551 companies laid off 152,922 employees;
• in 2023, 1,193 companies laid off 264,220 employees;
• in 2022, 1,064 companies laid off 165,269 employees.

The number of software developer job openings on the popular job search site Indeed has been falling since 2022.

Source: Federal Reserve Economic Data.

Get ready for layoffs: AI will lead to massive layoffs

Millions of employees could lose their jobs to artificial intelligence. British unions will be warned of this at next months Congress, writes the .

The organizations will call on banks, insurance companies and accounting firms to prepare to pay for retraining millions of workers.

The unions are relying on a June report from Citigroup that said half of banking jobs will be cut as a result of automation.

Meanwhile, Swedish company Klarna to cut nearly half of its staff amid the introduction of artificial intelligence.

CEO Sebastian Semiatkowski said AI helped reduce the firms second-quarter losses to SEK10 million from SEK854 million ($84 million) a year ago.

Over the past year, the company has cut its workforce from 5,000 employees to 3,800. Speaking to the FT, Siemiatkowski said their numbers could be reduced to 2,000 in the coming years. Artificial intelligence is replacing workers in customer service and marketing.

According to the CEO of the fintech firm, AI provides benefits even if it leads to lower employment, but thats a problem governments should address. Klarna has increased average annual revenue per employee from $400,000 to $700,000 through layoffs and cost reductions thanks to artificial intelligence.