Two Cents

- Are you nervous about being la Well, according to the news, you should be.

Unless you're a trades person or a healthcare worker, AI is coming for your job.

- At least that's what a lot of CEOs have been telling us.

In the last several months, companies have been shedding white collar jobs like crazy and attributing it to artificial intelligence.

- Right now, it seem concentrated in the tech sector, but if this trend continues, it's only a matter of time until this show is written, host and edited by algorithms.

- Unless it already is.

Are we real, or the hallucination of an LLM-t on hundreds of "Two Cents" episo - [Philip] Don't be silly.

If that were the case, it probably would've given me my old mustache.

- [Julia] Yeah, I guess you're r - Before we go full "Black Mirro it's important to take these CEO's assertions with a big grain of salt.

The actual evidence points to a that is neither as profitable for companies or as frightening for workers as the hype suggests.

- In fact, what worries me most is why these companies would want to blame AI.

(upbeat playful music) - 2025 turned out to be a pretty lousy year for the job market.

Every month of job growth came in below the average for the previous year, amounting to a yearly tota that was the worst since 2009, not including COVID.

And 2026 doesn't look much bette with a lot of high profile layoffs at big tech companies like Amazon, Salesforce, Pinterest, and Klarna.

In February of 2026, the finance tech firm Block anno it would cut half its workforce, and Mark Zuckerberg is reportedl to lay off 20% of Meta staff.

- Most of these CEOs are telling their shareholders and the public that these workers are no longer needed because of the huge increas in productivity powered by AI.

Thanks to ChatGPT and Claude Cod tasks that used to take all day are now finished in a matter of minutes.

One employee can do the work of That's a bit of an exaggeration, but the basic story we're hearing again and again is that across industries, AI is making human workers obsol - Except that it's not really.

While there are some isolated ex of certain tasks being streamlin like customer service and legal on the macro level, economists have yet to see a significant impact.

The Penn Wharton Budget Model estimated a 0.01% boost to productivity in 2025 due to A And in a survey of over 6,000 senior business executives, 90% reported no impact to productivity or employment.

A lot of companies are investing and investing heavily, but very few have implemented it that saves substantial time or m - One reason for this discrepanc might be an economic theory know as the productivity paradox.

In the 1970s and '80s, U companies poured tons of money into information technology.

In a very short span of time, computers went from a specialize to a commonplace object in stores, homes, and offices.

Typewriters and credit car imprinters were quickly replaced by word processors and point-of-sale terminals.

Think of the time saved.

And yet for 25 years, productivity growth actually slo How could that be?

- Well, according to some econom just because a new technology is doesn't mean we know how to use It can take a long time for existing systems to adapt.

There's a lot of trial an error and wasted time and money.

That may be what's happening with AI today.

Think of fast food restaurants that scrapped their AI-based ordering systems or help centers that had to rehire human operators after customer complaints.

According to MIT, 95% of AI pilo in the workplace have failed.

- This experimental stage may actually be having negative impact on productivity.

Workers report being forced to u even when they don't want to.

Some studies show that teams using AI take longer to finish tasks, and the quality of the wor can suffer, known as work slop, which requires more quality control on the back end.

- Take Block, for instance.

Although the company heads bragged about a 40% increase in code production, 95% of their AI produced code had to be altered by human coder because it wasn't up to company increasing the time spent on human reviews by 91%.

Essentially, engineers across the tech industry are spending less time writing c but more time fixing sloppy AI c It's fueling feelings of burnout, resentment, and job dissatisfaction.

- How does all of this square with what CEOs are saying?

To be fair, not all these companies are claiming that AI has already replaced wor Meta and Pinterest both justified their staff cuts as a way to free up money to invest more heavily in AI.

CEO Andy Jassy initially blamed for the loss of over 30,000 jobs before backpedaling that the lay were, "Not really AI-driven, not right now at least."

One survey found that the majority of organizations who cited AI as a reason for cut had done so in anticipation of productivity gains.

- The discrepancy between what they're saying and what's really happening could be as simple as that.

All these CEOs are so convinced that AI will make human workers obsolete someday that they're just gonna g ahead and lay everyone off now.

- But skeptics argue that there might be another more urgent incentive for this n - Our economy is in a bit of a b if you haven't noticed.

OpenAI's market valuation is gre than Netflix, Chevron, or McDona even though they have yet to fig how to make a profit.

Investors seem to be much less i in how a company is doing than how they are positioned to do in the future, and no buzzword communicate future potential quite like AI.

- So if you're a CEO who just had to lay off a bunch of employees, would you rather tell your share that it's because sales are down or because you're embracing an exciting new technology?

The former might lower your stoc while the ladder might give it a That's what happened to Block.

The company had been suffering from a declining valuation for several months, but after CEO Jack Dorsey announ the supposedly AI-driven layoffs the stock price jumped 20%.

- As if the pressure from the stock market wasn't enough, there's another wild card at pla Donald Trump.

This president has shown a willi to use his office to punish comp and CEOs who displease him.

Blaming layoffs on tariffs or a sluggish economy could attract unwanted attention from the White House.

It's much safer to paint a rosy of technological efficiency.

- So if AI isn't behind the layoffs, what's going on?

Many analysts think that thi is a normal market correction.

The pandemic was a great time for tech companies with all of us stuck indoors on our screens and they went on a hiring spree.

Today, they simply don't need as much staff and AI makes a great excuse to let them go.

A tactic some call AI washing.

- That isn't to say AI isn't coming for your job someday, but as of now, the productivity gains are not enough to justify the staggering amount being poured into it.

And that is perhaps the final, most important incentive of all.

These tech CEOs have raise hundreds of billions of dollars on the promise that AI will be the most revolutionary technology since the combustion engine.

According to some estimates, the entire American economy is being propped up by AI-related spending, and the only way to make return on an investment that hug as if it actually does eliminate millions of jobs.

- But about three years after the launch of ChatGPT, we're still not seeing it in the and investors are starting to get a little antsy.

- Maybe these CEOs really do thi that massive productivity gains are just around the corner.

- Or maybe they're jus trying to keep the party going a little while longer.

- [Both] And that's our "Two Cen (upbeat playful music)