Many have expressed concern about artificial intelligence’s potential to displace jobs in the coming years, but it is already generating upheaval in one field where people once seemed invincible: technology.

In recent months, a small but rising number of tech organizations have mentioned AI as a reason for layoffs and rethinking new recruits, as Silicon Valley races to adapt to rapid improvements in technology being produced in its own backyard.

Chegg, an education technology business, announced last month in a regulatory filing that it was laying off 4% of its workforce, or approximately 80 individuals, “to better position the Company to execute against its AI strategy and to create long-term, sustainable value for its students and investors.”

In a May interview with Bloomberg, IBM CEO Arvind Krishna stated that the company expected to suspend hiring for roles that it believes will be replaced by AI in the coming years. (However, in a subsequent interview with Barrons, Krishna stated that he felt his earlier remarks were taken out of context and emphasized that “AI is going to create more jobs than it takes away.”)

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In late April, file-storage giant Dropbox said that it was laying off approximately 16% of its employees, or approximately 500 individuals, citing AI as a reason.

Don’t worry about the AI apocalypse. The real risks have already arrived.
Outplacement company Challenger, Gray & Christmas claimed in its most recent layoffs report that 3,900 individuals were laid off in May owing to AI, marking the first time the firm has broken out job cuts based on that issue. According to the firm, all of those layoffs occurred in the IT industry.

With these actions, Silicon Valley may not only be leading the charge in artificial intelligence development, but also providing an early insight into how businesses may adapt to those tools. Rather than rendering entire skill sets useless overnight, as some may worry, a new crop of AI tools appears to be compelling organizations to move resources to better take advantage of the technology — and placing a premium on people with AI knowledge.

“Over the last few months, AI has captured the world’s collective imagination, rapidly expanding the potential market for our next generation of AI-powered products more rapidly than any of us could have anticipated,” Dropbox CEO Drew Houston wrote in a memo to employees announcing the layoffs. “Our next stage of growth requires a different mix of skill sets, particularly in AI and early-stage product development.”

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Dropbox, in response to a request for comment on how its AI realignment is progressing, linked CNN to its employment page, where company is presently looking for numerous posts focusing on “New AI Initiatives.”

AI, according to Dan Wang, a professor at Columbia Business School, “will cause organizations to restructure,” but he doesn’t see machines replacing humans anytime soon.

“AI, as far as I see it, does not necessarily replace humans, but rather enhances human work,” Wang explained. “I believe that the type of competition that we should all be thinking about is that human specialists will be replaced by human specialists who can use AI tools.”

A story about two Silicon Valleys
The AI-driven tech cutbacks coincide with larger sector cuts. More than three years into the pandemic, many IT companies have been readjusting to an uncertain economic environment and dwindling levels of demand for digital services.

According to data compiled by, 212,294 people in the tech industry have been put off in 2023 alone, surpassing the 164,709 reported in 2022.

But, in the midst of the enormous layoffs, the tech industry has been gripped by an AI frenzy, investing significantly in AI talent and technology.

Just days after Microsoft announced plans to let off 10,000 employees as part of broader cost-cutting efforts, the corporation also acknowledged a “multibillion dollar” investment in OpenAI, the company behind ChatGPT, in January. In March, the Meta CEO stated plans to spend extensively in AI in the same letter to employees that Mark Zuckerberg used to announce plans to lay off another 10,000 people (after reducing 11,000 positions in November).

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Even software engineers in Silicon Valley, who were formerly thought to be in high demand, look to be in danger of losing their jobs or missing out on compensation increases to those with more AI experience.

Roger Lee, a company founder who has been tracking layoffs in the tech industry via his website, also runs, which analyzes job advertisements and compensation data from over 3,000 tech organizations.

According to Lee, a recent data analysis showed that the average wage for a senior software engineer specializing in artificial intelligence or machine learning is 12% higher than for those who do not concentrate in that field, a data point he refers to as “the AI premium.” According to him, the average income for a senior software engineer specializing in AI or machine learning has climbed by 4% since the beginning of the year, while the average salary for senior software engineers overall has remained unchanged.

Lee cited Dropbox as an example of a company that pays exceptionally well for AI professions, stating a base salary range of $276,300 to $373,800 for a Principal Machine Learning Engineer position. (According to, the current average compensation for a senior software engineer is $171,895.)

Those who want to succeed in the tech business and beyond should brush up on their AI skills.

Wang, a professor at Columbia Business School, told CNN that he began requiring his students to acquaint themselves with the new crop of generative AI technologies on the market this past spring semester. “That type of exposure, I think, is absolutely critical for setting themselves up for success and once they graduate,” Wang said.

Wang said that workers should know how to use AI technologies to become more efficient at whatever they’re doing rather than becoming AI specialists.

“That’s where the kind of battleground for talent is really shifting,” Wang explained, “as differentiation in terms of talent comes from creative and effective ways to integrate AI into daily tasks.”


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