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US companies cut jobs amid AI investments


The U.S. economy is showing signs of stability, but a wave of layoffs is sweeping through major companies, including Procter & Gamble, Microsoft, Citigroup, Walmart, Klarna, Disney, Paramount, and Warner Bros. Discovery, according to CNBC. Despite a steady labor market, these companies are under pressure to reduce costs due to global uncertainty linked to tariffs imposed by President Donald Trump.

Experts indicate that while government job cuts are decreasing, companies are still feeling the financial strain. Many have resorted to raising prices, but layoffs remain a significant cost-cutting measure. Concerns persist about how tariffs and trade tensions might slow the economy overall.

Artificial intelligence is also playing a growing role in these layoffs. Klarna’s CEO revealed that the company has cut 40% of jobs partly due to AI investments. Shopify CEO Tobias Lütke told employees in April that they must justify why tasks cannot be performed by AI before requesting additional workers and resources.

Google is also making moves to free up cash for AI investments. The company is offering voluntary buyouts to U.S. employees across multiple teams, including search, ads, engineering, and research, as it plans to spend about $75 billion this year on capital expenses. This is part of Google’s strategy to expand AI features like its new “AI Mode” search tool while maintaining cost efficiency, according to The Wall Street Journal.

Industry leaders warn that AI could trigger a “white-collar job apocalypse.” The CEO of Anthropic told Axios that AI could eliminate half of all entry-level white-collar jobs within 1 to 5 years, potentially causing unemployment rates to spike to 10 or even 20 percent. He is advocating for more transparency from AI companies and urging the government to prepare for the potential impact, suggesting a “token tax” on AI models to help redistribute wealth if job losses become severe.

The latest job report also highlights a challenging landscape for new graduates, with March and April job gains revised down by a combined 95,000 jobs. As companies slow hiring, current workers are opting to stay in their positions.



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