In the last big crisis, that of 2008, the massive layoffs were decided by the bosses. Now, in 2023 and with a possible recession knocking on the doors, it is likely that the next wave of forced leave will be selected by an algorithm. Yes, a computer program will be able to choose who keeps their job and who goes to the streets. Human beings will simply carry out their orders.
A whopping 98% of hiring managers say they will rely, at least in part, on computer programs or algorithms to decide who to fire in the event of a recession expected in 2023, according to a recent survey by Capterra, which helps small businesses companies to choose software.
According to Capterra, a unit of technology research giant Gartner, this percentage is higher than the 2% of large companies that turned to big data during the Great Recession of 2007-09. In November, Capterra surveyed 300 HR managers from large companies and some small and medium-sized ones.
“In the last 15 years, the HR software market has exploded,” Brian Westfall, Capterra’s principal HR analyst, told Techxplore. Company managers “trust systems… to make a lot of decisions and that will extend to the firing decisions they make.”
HR tech companies claim the software eliminates human bias in firing decisions by quickly calculating a number of employee metrics, such as skills, performance, and productivity, and even projects the outcome if employees are fired. certain employees and maintain others.
But critics say algorithms can also make judgments that are too simplistic, overlooking nuances that a human would take into account, like an incompetent boss hindering an employee from performing well.
How do companies decide layoffs?
35% of the HR executives surveyed affirm that they will be guided mainly or exclusively by Big Data when it comes to cutting labor costs. 20% say that their decisions will be guided mostly or exclusively by “gut instinct”, which means that a person will make decisions with little or no help from a computer.
Almost half take an intermediate approach. 46% of HR professionals say they will trust data and gut feeling in equal measure.
Tech companies like Amazon, Facebook’s parent company Meta, and Twitter have probably already relied heavily on the software, laying off tens of thousands of employees in 2022 and early 2023, Westfall says.
Companies turn to these programs not only to figure out who to fire, but also to decide how to reduce labor costs, for example, by cutting employees’ work hours rather than laying them off, Westfall says.
In recent years, companies have implemented more and more human resources software, and the algorithms that help them screen job applicants and decide who to hire have become more widespread than firing programs, Westfall says.
Layoffs due to Artificial Intelligence
Technology is not only going to lay people off immediately, but it is already putting a lot of people out of work. Google is just the latest company to announce major downsizing in line with its priority for artificial intelligence.
In a Friday blog post titled “A Tough Call to Prepare for the Future,” Sundar Pichai, the CEO of Google’s parent company Alphabet, announced that the company is cutting approximately 12,000 positions to better capitalize on “early investment from Google on AI” and pursue the “substantial opportunity before us with AI through our products.” This, Pichai said, will include soon sharing “brand new experiences for users, developers and businesses.”
Microsoft also announced mass layoffs this week, with CEO Satya Nadella calling artificial intelligence “the next great wave of computing” and speaking of a need to “continually deliver results while investing in our long-term opportunity.” .”
The New York Times reported that Microsoft is considering investing another $10 billion in its OpenAI company, known for creating the ChatGPT communication robot. And the Times also noted that Microsoft is in the process of acquiring Activision, a gaming platform that Nadella has said could play a significant role in his AI plans.
And we can’t forget about Facebook. In November, CEO Mark Zuckerberg announced that more than 11,000 jobs had been cut as the company shifted resources to its AI-powered search engine, advertising and business platforms, and metaverse efforts like Reality Labs, which focuses intensely on projects that use AI.
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