The Ripple Effect of Remote Working and Artificial Intelligence on Massive Global Layoffs

By Shiwani Pradhan, Correspondent, Consultants Review Friday, 09 February 2024

Employees overwhelmingly prefer the ability to work from home. According to a Gallup poll, almost 90% of respondents like it either fully or in a hybrid configuration. However, given that many are summoning workers back into the office, it doesn't seem like employers are entirely on board. Employers' reluctance to accept remote employment is quite perplexing. After all, according to data from the University of Chicago's Becker Friedman Institute, doing away with commutes allows the typical American worker to put in about an extra hour of work per day. Also, Gallup reports that employees who are required to work in an office are more likely to suffer from poor engagement and burnout. 

However, a lot of businesses insist on having employees work in offices. These might be the causes:

Reduction of Size

Pushing employees to report back to work may be a useful tactic for a business planning to shrink to prevent or minimize layoffs. Criteria's 2022 Hiring Benchmark Report indicates that companies with a high requirement for in-person work have higher staff turnover rates. Therefore, a company might compel a return to the workplace and give workers the option to leave or not, as opposed to terminating them.

In recent years, many high-profile corporations have announced return-to-work orders close to layoffs. Several significant examples:

David Risher, the CEO of Lyft, disclosed on April 28 that workers will be required to work from the office three days a week or more. This coincided with Lyft announcing yet another wave of layoffs following the departure of 13% of its employees in November. Just one month after saying it would lay off over 18,000 people, Amazon issued a plea in February for staff members to return to work at least three days a week beginning in May. In March, another 9,000 layoffs were declared. Elon Musk ordered workers to return to offices full-time, starting on November 10, in his first memo to them after purchasing Twitter (now X), according to many accounts. Before the year was over, there were many waves of layoffs.


According to a Microsoft investigation, working from home during the pandemic reduced employee interconnectedness, collaboration, and tiredness. Microsoft's investigation revealed that while emails and other kinds of contact rose with remote work, employees found it more challenging to communicate complicated information. In some positions, like coaching, counseling, or teaching, remote employment can present challenges when it comes to collaboration and connection. However, several well-known CEOs contend that it's essential for the majority of employees. A few instances are:

Andy Jassy, the CEO of Amazon, stated in a message on return-to-office plans that "Collaborating and inventing is easier and more effective when we're in person. I do think for a business like ours, which is an innovative, collaborative apprenticeship culture, this is not ideal for us." 

"We're going to correct it as soon as possible. It was an anomaly. Disney CEO Bob Iger believes that relationships are essential in the workplace. Nothing can replace the chance to grow professionally by learning from leaders and mentors, or the capacity to interact, observe, and create with peers that comes from being physically together in a creative firm like ours," Andy said in a message acquired by CNBC.


According to Microsoft research from 2022, employee productivity rose on many metrics. However, 85% of bosses stated they had trouble believing that workers were producing during hybrid work. The use of traditional productivity visual indicators has diminished. Employers' interest in monitoring is mostly driven by ambiguity and anxiety about what their employees are doing, according to ExpressVPN. According to a poll conducted in January 2021, 57% of managers stated they don't trust their staff to operate independently.

Remote Work Shift Increases Layoffs and Impacts Work-from-Home Transition

Following the global trend to remote work, many businesses are faced with the painful reality of reducing their personnel. Are modern-day equivalents of the medieval scribe-think analysts, programmers, and even the occasional opinion columnist-becoming extinct? According to one poll, finance and technology accounted for over 39,000 reported layoffs in the United States last month, and the 900 more layoffs by DocuSign Inc. and Snap Inc. reflect a continued rush to "rip the Band-Aid" and shift to more cost-effective AI and automation. Developers are referencing Marx on internet forums and debating if they should retrain as electricians.  

The recent massive $197 billion one-day market-cap rise of Meta Platforms Inc. suggests that investors and governments eager to keep up in the digital race are not too concerned. After all, it's simpler to promote AI's promise to increase productivity and economic growth when there is a lack of Luddites in sight, low unemployment, and strong demand. In an interview with the BBC, Bank of England chief Andrew Bailey stated that technology will not "mass destroy jobs."

However, merely hoping for the best is insufficient in reaction to the possible labor market disruptions that AI may cause. A flurry of research is beginning to scrape the surface of what happens when AI is introduced into the realm of white-collar drudgery. 

Thus far, research has concentrated on the types of standard text-based jobs that generative AI is most suited to do, such as professional writing, programming, and customer service advisory. Positively, it appears that workers are better served by this technology when it is used as a companion rather than as a substitute. According to one research, coders who used Microsoft Corp. and OpenAI's GitHub Copilot-an AI assistant that provides recommendations and prompts-completed tasks on average 55.8% quicker. According to different research, employees who used he said to accomplish duties like press releases and analytical plans did so 10 minutes faster and with higher quality. Another study found that customer service representatives who used AI helpers finished 14% more work in one hour.

These findings also imply that people with less experience benefited more from AI, which might account for why tech's Young Turks are more enthusiastic about these technologies than the establishment. The bright side is that AI may be a productivity tool that helps individuals at the bottom of the hierarchy learn and grow while also giving more senior coworkers more time to themselves, rather than tearing up the workplace. In 1960, computer scientist J.C.R. Licklider envisioned this type of perfect "Man-Computer Symbiosis," lamenting that he was spending eighty-five percent of his thinking time "getting in a position to think"- that is, gathering data or organizing it, such as creating graphs-rather than on more useful tasks.

Another concern is whether, rather than increasing demand, quicker content creation devalues producers and lowers salaries. "Even if AI helps people with lower skill levels, it doesn't mean everyone benefits," argues Professor Carl-Benedikt Frey of Oxford Martin School. He uses Uber Technologies Inc. as an example, which observed a rise in sign-ups and a decrease in the pay of established drivers as a result of decreasing entry barriers into ride-hailing services. The possibility of less labor demand, lower pay, and fewer employment opportunities was highlighted by the IMF last month when it issued a warning about the impact of AI on jobs in industrialized nations. Certain occupations may just vanish.

This is not to suggest that we should get into a frenzy over an Armageddon of employment. We could later reflect on the past and marvel at how we managed without artificial intelligence. But if it results in greater inequality and lower salaries, it becomes critical how we handle the near term. In the future when robots are capable of writing code but are unable to address simple problems like a leaky faucet, calls to "reskill" or "learn Python" will become trite.

What ought to be carried out? 

Three concepts appear to be worthwhile. One is to maintain a strict regulatory grip on the leading AI providers that control this "uniquely exploitative" technology, in the words of former StabilityAI executive Ed Newton-Rex, to prevent workers' data from being inappropriately ingested by the machine. The second is to expand the uses of AI by developing new activities related to it, maybe by bringing its supply chain in-house, such as the manufacturing of the chips that drive it. Finally, ensuring there is a social safety net for people in need-such as universal basic income.


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