Palantir CEO Alex Karp at a July 2019 conference in Sun Valley, Idaho. Photo: Drew Angerer
It’s the ticking time bomb in the global economy, and every CEO knows it: AI is already powerful enough to replace millions of jobs. So why haven’t the mass layoffs begun? The answer has little to do with technology and everything to do with fear. Corporate leaders are quietly waiting to see who will be the first to pull the trigger.
My discussions about Generative AI reveal a stark generational divide. Most people under 35 are convinced that AI is a reality, not a gimmick, and that the displacement of human workers is an urgent, present-day issue. For many over 35, the assessment is more cautious; they believe the replacement will happen, but not for another five or ten years.
The problem is that the second group is several steps behind. The AI revolution isn’t being held back because the technology isn’t ready. It’s being held back for political reasons. CEOs are nervously looking at each other, waiting for someone else to make the first move and announce that they are eliminating a significant number of jobs because AI can do the work faster and cheaper.
They are tiptoeing around what they already know. And they are telegraphing their intentions subliminally.
Take Palantir’s CEO, Alex Karp. During an interview with CNBC in August, he said: “We’re planning to grow our revenue … while decreasing our number of people.” Karp then continued: “This is a crazy, efficient revolution. The goal is to get 10x revenue and have 3,600 people. We have now 4,100.”
The subtext is clear: Palantir already considers 500 of its employees to be a surplus that AI could replace. It could increase its revenue by 10x while reducing its workforce by almost 12.2%.
Look at Amazon. The company has more than one million robots (Hercules, Pegasus, and Proteus, its fully autonomous robot) in its facilities and believes that AI will help increase its robot mobility by 10%. The number of its robots is nearly equivalent to the 1.546 million people (full-time and part-time) that the company employs globally. CEO Andy Jassy has already warned his workforce of what’s to come.
“We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs,” Jassy told employees in a memo last June. “It’s hard to know exactly where this nets out over time, but in the next few years, we expect that this will reduce our total corporate workforce.”
CEOs are waiting for political cover that isn’t coming. None of them want to become the poster child for the revolution that killed human jobs in America. They don’t want to become the target of politicians, knowing that on this issue, the attacks will come from both the populist left and the populist right.
The problem is that politicians are just as unprepared as the over-35s. They seem to believe this is a problem for the next administration, a challenge for a few years down the road. They are wrong. The problem is here now.
The questions are urgent: what will the displaced workers do? What safety nets need to be built? What happens to the healthcare of millions who are still a long way from retirement? These are questions politicians have not yet addressed, likely because they don’t have the answers. So, for now, the CEOs are buying them time.
Instead of mass firings, a quieter trend has emerged: hiring freezes. Increasingly, managers are being forced to justify why a human is needed for a role that an AI could potentially perform. This is already devastating the job market for young people. According to Handshake, a career platform for Gen Z employees, job listings for entry-level corporate roles have declined 15% over the past year.
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