Groundbreaking and Alarming trend analysis predicts that between 530,00 and 800,000 jobs could be lost in the United States in the tech sector alone due to AI by the end of 2024

Understanding the Projected Impact of AI on Tech Jobs by 2024

As the technology landscape rapidly evolves, the rise of AI poses significant implications for the job market. Recent data has sparked a conversation about the future of employment in the tech sector. To offer a clearer picture, I’ve developed a method, with the help of ChatGPT, to forecast the extent of layoffs in the tech industry by the end of 2024. Here’s a step-by-step breakdown of our approach:

Step 1: Establishing the Baseline

I began by reviewing layoff data from January to April 2024. By examining specific company details, such as Checkr, which reported a 32% reduction in its workforce, I was able to determine an initial layoff rate. Later, I ran prediction calculations using a more conservative estimate of a 10% workforce reduction on average. Nonetheless, whether companies decide to let go of 3 people on a team of 10 or 1 person on a team of 10, the numbers are very alarming; we could see up to half a million tech workers become unemployed by the end of 2024.

Step 2: Expanding Our Horizon

To gain a comprehensive view, I considered the broader landscape of small to medium-sized tech companies in the U.S. A combination of research findings from sources like Built In and McKinsey & Company helped me estimate a total of 5,370 active tech SMBs early in the year.

Step 3: Synthesizing Data for Projection

Using the initial layoff data and the number of tech SMBs, I calculated the average percentage of workforce layoffs. This average served as a benchmark for predicting future trends.

Step 4: The Exponential Growth Model

I applied an exponential growth model to project future layoffs, factoring in a quarterly growth rate of 5%. This model reflects the potential acceleration in layoffs due to factors like AI adoption and automation.

Final Projections: A Closer Look

With ChatGPT’s Python-based model capabilities, it predicted the layoffs for Q2, Q3, and Q4 of 2024. Here’s the code snippet I used for the calculation:

By summing the projected layoffs for each quarter, I arrived at a total projected figure of approximately 796,386 jobs potentially lost from mid-April 2024 to the end of December 2024. However, if we adjust the prediction to use a 10% reduction in the workforce instead of 32%, estimates suggest that approximately 530,924 jobs could be potentially lost during the same period.

Interpreting the Results

My analysis suggests a significant impact on the U.S. tech sector's workforce due to AI advancements. It's essential to consider that these projections are based on current trends and data. As the year progresses, I recommend updating the model with fresh data to refine the forecast's accuracy. I am eager for IMF’s Chapter 3 “World Economic Outlook 2024” report to be released, scheduled for Tuesday April 16th, as this will provide most up-to-date information to refine these predictions considering latest tech industry trends, employment, and other relevant data.

Final Thoughts

While the model points to a challenging horizon for tech employment, it also underscores the need for proactive measures to re-skill and transition the workforce for the AI era. The full impact of AI on jobs is a complex interplay of technology, economics, and societal shifts, and I will continue to monitor and report on these trends as they develop.

A Call to Action for Legislative Measures

The projections are stark and clear: if no action is taken, we may see hundreds of thousands of jobs lost due to AI-driven changes in the tech sector alone by the end of 2024. In light of this, we urge Congress to:

Invest in Workforce Development: Allocate funding for upskilling and reskilling programs that can prepare the workforce for the jobs of the future. This investment should focus on both tech and non-tech roles that AI is less likely to displace.
Encourage Public-Private Partnerships: Foster collaborations between government, private sector, and educational institutions to create targeted training programs that align with the evolving demands of the job market.
Institute AI Governance: Implement regulations to guide the ethical development and deployment of AI, ensuring that it augments human work rather than replaces it entirely.
Expand Safety Nets: Reinforce and expand unemployment benefits and social safety nets to support those displaced by technological advancements.
Promote Job Creation: Incentivize the creation of new jobs in sectors likely to grow as a result of AI, such as AI maintenance and oversight, cybersecurity, and data analysis.
Fund Research and Monitoring: Support ongoing research into the economic impacts of AI and automation, enabling policymakers to make informed decisions based on the latest data.
Enhance Educational Curricula: Revise educational curricula to include AI literacy and data competency, ensuring the next generation enters the workforce with the skills necessary to thrive in an AI-integrated job market.

The future of work is not predetermined—it is shaped by the choices we make today. Congress has the power and the responsibility to enact policies that will mitigate the risks and harness the potential of AI.

The time for action is now.

As we stand on the cusp of transformative change, the imperative for action has never been more urgent. The trajectory of our economy and the preservation of our workforce's well-being depend on the decisions we make in the immediate future. Should we choose to postpone these crucial decisions until after the election, we risk more than just the displacement of workers; We risk surrendering our nation's position as a frontrunner in the global economy.

The consequences of inaction are not confined to the borders of our labor market; they ripple through the very fabric of our economic leadership. As AI and automation continue to advance, the nations that choose to act, adapt, and adopt will shape the new economic era. Those that delay will inevitably encounter setbacks in innovation, productivity, and competitiveness.

Thus, the urgent call to Congress, to industry leaders, and to the public is unequivocal: the time to act is now. We must embrace a proactive stance, integrating foresight into our policies, and innovation into our economic planning. In doing so, we not only safeguard our current workforce but also fortify our nation's legacy as a pioneer of the global economy. Let us not defer this vital responsibility to a future electoral aftermath, for the stakes are too high, and the opportunities too fleeting. The time to secure our place on the global stage is not tomorrow—it is today.

See below the ChatGPT prompts and the different data sources that were provided to calculate the above predictions.

PDF Reports provided to ChatGPT for context: