Amazon and UPS Cut 48,000 Jobs to Automation. Is the AI Job Apocalypse Here?

Thousands of jobs have been cut by Amazon, UPS, and other major US corporations in a significant escalation of what many have dubbed the AI job apocalypse. Amazon cut 14,000 jobs due to AI, while UPS has cut 34,000 positions, including drivers and package handlers, as the peak holiday season approaches.  “AI and robotics help to make jobs safer, while also reducing repetitive tasks,” a spokesperson said in an NBC report.

Federal Reserve Chair Jerome Powell said “job creation is pretty close to zero” during a press conference and connected it to the proliferation of AI and automation. Inflation remains elevated, consumer spending is high, and the federal unemployment rate is a low 4.3%.

Powell explained the contradictory market indicators and how that affects the decision to lower rates.“We have upside risks to inflation, downside risks to employment,” Powell said. “This is a very difficult thing for a central bank, because one of those calls for rates to be lower, one calls for rates to be higher.”

Historically, increased corporate spending has led to job creation, but the construction of data centers in the big tech AI race is having the opposite effect on the job market. White collar jobs are at the highest risk of being cut as AI tools allow an individual worker to utilize large language models (LLMs) like Chat GPT and Grok to do the work that once took 5-10 employees to complete.

Geoffrey Hinton is known as the “Godfather of AI,” and he said the idea that the changing landscape created by AI will create new jobs to replace jobs lost is likely false. “This is a very different kind of technology,” Hinton said in a YouTube interview with Steven Bartlet. “If it can do all mundane human intellectual labor, then what new jobs is it going to create? You’d have to be very skilled to have a job that it couldn’t just do. So, I don’t think they’re right.”

US employers have announced 964,000 layoffs this year, according to a Challenger, Gray & Christmas report, which is the highest since the COVID-19 lockdowns in 2020.

Hinton and others have expressed that this technological advancement is not one that will necessarily change the job market to create new types of jobs for workers who get laid off due to continued automation. The Trump administration has focused on deregulating AI to help the US build “the largest AI ecosystem” and defeat China in the AI race for “global dominance.” Trump’s AI Action Plan purports to usher in “a new Golden Age of innovation, human flourishing, and technological achievement for the American people.”

The Trump administration is focusing on upskilling the workforce for the new AI-based job force and on creating construction jobs to build data centers that power the AI ecosystem. The Trump plan makes no mention of a safety net, such as a universal basic income (UBI), that would provide a regular payment to everyone without needing to work. This type of payment would ensure everyone has access to basic needs like housing, food, and healthcare.

Tech billionaire Elon Musk has said that universal high income will be the standard as AI increases productivity, efficiency, and abundance. A job market that displaces the majority of workers will create new issues in finding purpose and meaning in life. Musk said people will be able to work as a hobby, but it will not be necessary.

Amazon CEO Jeff Bezos has also discussed the pending job apocalypse and the purpose people can find in a new economy that has no use for the majority of workers. Bezos said that purpose doesn’t come from being the best at any particular thing, but it comes from the close familial relationships and friendships.

“The question will really be one of meaning,” Musk said. “If the computer can do, and the robots can do, everything better than you, then does your life have meaning?”

A 2023 survey found that young adults (18-25) have twice the amount of anxiety and depression as teens. 58% of young adults said they experienced little or no purpose in their lives during the last month. A 2021 Pew Research Center study found that 25% of respondents cited career and occupation as a key factor in what makes life meaningful. This was second behind family and relationships, which 38% of respondents mentioned as a key driver of meaning in their lives.

As social media and smart phone use has increased substantially alongside levels of depression and anxiety, the potential for a jobless world reliant on UBI can potentially lead to higher rates of video game playing and social media consumption with the free time. This is a common critique of UBI that was made by the Cato Institute in 2017.

Reporter Niamh Rowe wrote in Quartz earlier this month about the struggle with relying on UBI as the solution. She points out that a large percentage of the jobs lost to AI will be white collar jobs in the higher income levels, which means spending will dramatically drop and cause severe economic conditions that hinder the growth of the AI infrastructure that will bring the abundance Musk talks about.

Rowe ends the article with two potential realities – one where the workforce moves beyond the “expertise economy” in favor of skills like “judgment, leadership, innovative thinking.” The other potential, Rowe writes, is “homo sapiens have handed over cognition — the thing that allowed them to rule over the animal kingdom and build civilization — to something that’s unburdened by corporeal fallibility. Should bots outsmart us, it feels somewhat inevitable that some version of UBI will follow. Left with a clunky, and arguably regressive, policy, may reveal the paradox of capitalism about which Marx cautioned.”

The McKinsey Global Institute estimates 30% of all hours worked in the US economy will be replaced by automation by 2030. Some of the people in these jobs may retain their positions and work differently, while others will lose their jobs entirely and have to learn a new skill to integrate into the new economy.