High-paying corporate jobs are shrinking. Is AI to blame, or do these roles now require specialised expertise?

A look at subreddits reveals that both young and middle-aged IT professionals are facing growing uncertainty about their jobs, with many recent engineering graduates struggling to find employment. While mass layoffs have jolted corporate America, there are signs that no one is safe right now, as most of these companies also operate large offices in countries like India and maintain a sizeable presence here.

Layoffs are happening across other industries as well, from media to FMCG. (Image: Anuj Bhatia/The Indian Express)

Though many large tech companies have declined to provide specific reasons for announced job reductions, tech leaders, and those who hold substantial power, are increasingly citing artificial intelligence as a key factor in hiring and headcount reductions.

On June 18, Amazon CEO Andy Jassy announced in a memo to its 1.5 million employees that, as the company embraces artificial intelligence tools across the organisation, it will ultimately “reduce our total corporate workforce as we get efficiency gains” over time. Jassy added that generative AI will ‘change the way our work is done,’ and said the company will eventually ‘need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs.’

And while Amazon has not yet announced another round of layoffs, Jassy’s memo is a clear indicator that job cuts are coming soon — and they are likely to hit corporate employees (those with high salaries, annual bonuses, and stock awards) the hardest.

Microsoft, too, is planning to cut corporate jobs, according to a Bloomberg report on June 19. The cuts are expected to affect employees in sales roles. While the exact timing of the layoffs hasn’t been finalised, several thousand jobs are expected to be eliminated. If carried out, this would mark Microsoft’s fourth round of job cuts this year. Last month, during the company’s most recent round of layoffs, 3 per cent of Microsoft employees were affected globally — roughly 6,000 people — with a heavy emphasis on software developers.

Google also made a similar move on June 10, offering voluntary buyouts to employees across several of its teams, including Communications, Marketing, Research, Core, and Knowledge & Information. And it’s not just big tech — layoffs are happening across other industries as well, from media to FMCG, with corporate jobs being impacted the most.

AI replacing white-collar jobs

Once known for providing job security, better work-life balance, and extremely high pay, recent cuts have threatened the stability white-collar workers once enjoyed. There is increasing evidence that companies are eliminating positions held by trained and seasoned employees—either due to financial pressure or the elimination of certain job categories—and are using artificial intelligence tools to support the remaining workforce. Most of the cuts can be seen in Human Resources, marketing and sales, legal, accounting, and even coding.

Companies claim that AI isn’t replacing workers, but that may not be the case. (Image: Anuj Bhatia/The Indian Express)

Amazon CEO Jassy’s memo, in which he said employees should figure out ‘how to get more done with scrappier teams,’ shows how AI will become a core part of daily work. Many of the tasks that previously required large teams can now be done with fewer people by automating certain functions — letting AI do the job.

Goldman Sachs CEO David Solomon recently stated that AI can draft 95 per cent of an IPO prospectus in minutes. According to him, the efficiency gains are significant, considering that the same task used to take a six-person team two weeks to complete. Meta CEO Mark Zuckerberg and Microsoft CEO Satya Nadella, in a fireside chat at Meta’s LlamaCon in April this year, said that 30 per cent of code within their companies is now written by AI.

Klarna CEO Sebastian Siemiatkowski recently said that the fintech company has shrunk its head count by 40 per cent, in part due to investments in AI. Likewise, Shopify CEO Tobias Lütke told employees in April that they will have to prove why tasks can’t be performed by AI before asking for more workers and resources.

And while companies claim that AI isn’t replacing workers, that may not be the case. Although the narrative suggests that workers familiar with AI tools have a higher chance of being retained, in many instances, they are replacing entire teams or employees with experience in a specific field.

Middle-manager roles are being eliminated

A new trend seems to be emerging in the corporate world: the elimination of middle managers. Large tech companies like Meta, Amazon, Google, Microsoft, and Salesforce are thinning out management roles — often referred to as ‘bossing’ — to enable faster and more effective decision-making. Take the case of Starbucks, which recently announced 1,100 corporate job cuts, or Nissan, which revealed a 20 per cent global reduction in its managerial workforce.

In both big tech and startups, there has been a noticeable shift in mindset — everyone now wants to be a manager. Engineers increasingly prefer leadership roles over remaining individual contributors. As a result, top-notch developers often stop coding and move into management. But at a time when companies like Meta are actively seeking exceptional coders, these once-great developers end up spending their days micromanaging teams and workflows instead of writing code.

During the first wave of layoffs, Meta was one of the tech companies that eliminated many middle management roles across the organisation. In fact, Meta CEO Mark Zuckerberg stated in an internal Q&A that he didn’t want ‘managers managing managers, managing managers, managing managers, managing the people who are doing the work. Data from McKinsey found that nearly half of middle managers devote less than a quarter of their working time to people management, and they aren’t contributing as individual contributors.

If well-paid managerial jobs are being eliminated or reduced, it could significantly impact a worker’s chances of becoming a manager. The aspiration to become a manager drives many motivated individuals to pursue an MBA, aiming to quickly climb the corporate ladder, and eventually reach the C-suite. Not that being a manager is an easy job; a lack of middle managers altogether or operating at less capacity could make staff unhappy and put more pressure on them without an effective manager.

Corporates have become choosy

Today, the job market is brutal, and knowledgeable, experienced white-collar workers are competing for scarce roles. This isn’t to say that companies are not hiring at all — they are, but only for specialised roles. Even though the threat to white-collar jobs is historically high, companies are still hiring where they believe a candidate adds real value.

Tech companies and large corporates are prioritising experience over training freshers. (Image: Anuj Bhatia/The Indian Express)

This could be for an existing project where there’s a talent shortage within the team, or when the company has no choice but to bring in external talent, even at a higher compensation. Take the case of Meta CEO Mark Zuckerberg, who is assembling a top artificial intelligence team for its “superintelligence” AI lab and is willing to poach OpenAI employees with offers as high as $100 million. Meta also recently hired Scale AI founder Alexandr Wang as part of a $14 billion deal.

Another truth is that jobs have become more complex and demand specialised skills, and for that, the talent pool is both rare and expensive. This is why companies are willing to spend millions on the right hires (at least, that’s how Silicon Valley has traditionally operated: pay whatever it takes to land a star software developer).

No one has the time to train employees and wait a year or more for a new recruit to match the skill level of the existing team. That’s why tech companies and large corporates are being extra cautious in their hiring. They are prioritising experience over training freshers, expecting candidates to step into roles already come with domain-level knowledge and skills.