The real reason behind mass tech layoffs is becoming more and more obvious, as Accenture has announced a significant investment in AI tech after cutting a substantial percentage of its workforce.
It's no secret that the two big tech stories right now are the explosion of generative AI platforms like ChatGPT and the sweeping layoffs that have hit employees across the industry. The connection is fairly obvious, but few companies have leaned into that causation as an actual reason, citing the “looming recession” as the main driver of their cost cutting measures.
Now, however, Accenture is making it pretty clear that AI is the future and they're willing to put their money where they mouth is.
Accenture Announces $3 Billion AI Investment
Announced in a company blog post, Accenture is going big on AI with a $3 billion investment over the next three years to “accelerate clients’ reinvention.”
“There is unprecedented interest in all areas of AI, and the substantial investment we are making in our Data & AI practice will help our clients move from interest to action to value, and in a responsible way with clear business cases.” – Julie Sweet, chair and CEO at Accenture
The AI push will take many forms, including investing in “assets, industry solutions, ventures, acquisitions, talent and ecosystem partnerships.” Primarily, though, this investment will go towards doubling the company's AI workforce, raising the total from 40,000 to a whopping 80,000 employees in that time period.
While Accenture is one of the tech companies banning employee use of AI, this investment should represent a big step for a company trying to compete with the likes of Microsoft and Google.
Accenture Layoffs This Year
All this new investment money must've come from somewhere, right? After all, businesses in a recession rarely have $3 million just lying around. So, where did all this extra capital come from?
Well, Accenture is one of the many tech companies that participated in the mass culling of employees over the last year, cutting more than 19,000 jobs in March 2023. Those cuts have continued since then, with Accenture laying off 200 Austin employees just this week.
Suffice it to say, these two actions are almost assuredly linked, with the popularity of ChatGPT and other generative AI platforms turning the tech industry on its head and leading to a paradigm shift that many employees may not survive.
The Future of Work With AI
It's safe to assume that this trend of layoffs followed by big AI investment is not going to change in the modern era. With generative AI platforms like ChatGPT performing so many tasks so well and so fast, there's a good chance that many jobs will fall by the wayside.
In fact, recent studies have found that as many as 80% of all jobs will be substantially impacted by generative AI at some level, which could spell disaster for the global economy.
So, what does the future of work with AI look like? Honestly, without a dramatic shift in how we imagine the societal infrastructure around work and pay, it looks pretty bleak.