Is this a "told you so" moment?
We are in a major technological era. Things are advancing rapidly, especially regarding artificial intelligence. The progress over the past 12 months have captured the attention of many. Now we are starting to see the impact of that.
My assertion is that the concept of "technology always creating more jobs than it destroys" is long dead. This was derived by looking at the national labor force participation rates in the United States. This peaked 25 years ago, providing a large sample size.
Now, we see things accelerating. Yet, many are still espousing that we are going to still see jobs being plentiful. This is not going to be the case in my view.
In fact, many of my writings discuss how income is going to be broken from labor, meaning something else will have to be created. The solution, in my opinion, is staking income.
Nevertheless, that is outside the scope of this article.
Here we are going to discuss Google.
AI Leader Killing Jobs
Google is a leading technology in anything it enters. This company is rushing deep into the AI race and becoming one of the leading companies. Its Google Gemini is garnering a lot of attention. There is no doubt that Google will be a player simply due to the data they have access to.
Isn't it interesting that one of the leading AI creators is also using said technology to eliminate jobs?
Naturally, this should not come as any surprise. We are going to see AI obliterate jobs in many industries. For Google, advertising is the place to start.
Here is what is being reported:
Google has been focusing a lot on AI advancements with announcements like Gemini and Google Bard. However, it looks like the company is also planning to implement it internally that might actually lead to what people feared the most: AI taking away human jobs. Google may potentially layoff 30,000 employees soon across its ad sales division, reported The Information.
Consider the idea of online ad sales. Do people work the phones trying to get advertisers? The answer is no. Hence, we can see what the company is thinking:
Notably, back in May this year, Google had announced new AI-powered ads that feature "natural-language conversational experience within Google Ads, designed to jump-start campaign creation and simplify Search ads." Google said its new AI could scan your website and "generate relevant and effective keywords, headlines, descriptions, images, and other assets," making the Google Ads chatbot one part designer and one part sales expert.
It is only a matter of time before the software Google is creating can handle all of this better than humans. This is something very basic when it comes to the development of this technology. Like finance, there are a lot less variables to deal with and no physical realm to enter. It is all digital and really comes the machine learning engine.
Technology companies have been laying off employees for the last year. Much of that had to do with the economic headwinds the industry faced. Now we are starting to see this potentially being driven by the advancement in AI.
This is something we must get use it. There will be a lot more of it in the future.
Cries For Help
We are going to see a lot of cries for help.
Personally, I believe this is the lowest unemployment rate we are going to see. Over the next few years, the combination of AI (brains) and robotics (body) is going to radically alter the labor market. While it will be slow at first, the acceleration is guaranteed.
If Google is considering letting go of 30K people because of AI, what will thinks look like in 18-24 months? How many other companies will be dealing with technology that is even more powerful than today? My guess is most will go down this path.
Which brings me back to the individuals. What are they going to do? When someone becomes obsolete, they are no longer needed. This is a basic fact of life. Certainly, something like advertising for Google is much different than, say, healthcare. However, we are seeing automation enter that field.
Here is the usual path:
Technology starts in area of deficit, in this case personnel. Hence we can look to fields where there is a shortage of workers. Truck drivers and nurses come to mind.
Then we have some technology developed that helps this with their job. It can handle some rudimentary tasks. Over time, the technology improves, eventually catching up to the human. Then the field with deficits suddenly starts to have layoffs.
Of course, there is another path.
Technology is created in those areas where it is easiest. For example, numbers for a computer is a piece of cake. That is why traders for exchanges and stockbrokers are out of work. The Internet basically made those people obsolete.
How will society handle this? Most expect things to remain the same. I do not know how many people Google employs but 30K workers sounds like a lot. Considering they are one of the two major online advertising platforms, how long until Facebook get the same idea? I am sure Mark Zuckerberg already is working on a solution.
As the say, the future is upon us.
Technology is deflationary by nature. Here is an example of it.
That said, do not fall for the common mantra "inflation bad, deflation good". When massive job loss occurs, people will realize how awful deflation is.
For those who work in the advertising department at Google, the lesson might come first hand.