No Business in New York Has Acknowledged Substituting Employees with AI

Since last March, more than 160 companies in New York state have submitted notices of mass layoffs. Notably, this group, which includes Amazon, Goldman Sachs, and other firms utilizing AI tools, did not attribute their job reductions to “technological innovation or automation” in their filings.

This option was introduced 11 months ago as part of a mandatory question for businesses with 50 or more employees that must report substantial job losses to the state. According to New York’s Department of Labor, as of the end of January, no employer had indicated technology as a cause for their workforce reductions.

In recent years, many organizations have praised transferring repetitive jobs such as customer service, sales, and accounting to AI systems. However, publicly acknowledging the replacement of human workers with AI agents or robots may lead to reputational damage. Moreover, economists encounter difficulties in linking layoffs to tech advancements, as companies may take years to fully adapt to new working methods.

Enter New York governor Kathy Hochul. To gain a clearer understanding of the current situation, she directed the Department of Labor to ask whether AI had prompted layoffs. This made New York the first state to include an AI option, according to legal experts.

Businesses in New York can choose from multiple reasons among a total of 17, including “bankruptcy,” “merger,” “relocation,” and “other,” in their required Worker Adjustment and Retraining Notification, or WARN, filings. If a company selects the tech and automation option, they are prompted to specify the technology involved, such as AI, robotics, or “software modernization.”

The rollout has generated over 750 notices from 162 firms impacting nearly 28,300 workers, yet the AI option has not been mentioned. This raises the possibility that companies may be avoiding the AI question, or it may signify that workers typically need only to worry about traditional layoff causes.

Among the filers are caterers and retailers whose employees are not typically associated with AI replacements. In contrast, Goldman Sachs reported layoffs that affected over 4,100 workers due to job cuts or location closures, per New York records. Amazon was among the top ten, with 660 workers impacted. Morgan Stanley, another adopter of AI, reported 260 jobs lost.

Internally, Goldman Sachs associated its layoffs last year with AI’s potential to enhance productivity. Amazon cautioned prior to its recent layoffs, which affected around 30,000 workers in total, that AI benefits would result in job cuts. A source told Bloomberg that a small fraction of Morgan Stanley’s layoffs was attributable to AI and automation. As these companies operate globally, it is also plausible that only employees outside of New York were laid off in favor of AI.

In total, nearly 55,000 US companies cited job cuts linked to AI adoption last year, according to an analysis by the job search firm Challenger, Gray & Christmas regarding public statements.

However, the absence of these developments in the specific New York data emphasizes the ongoing challenge of addressing a pressing concern: “Is AI going to take my job?”

Amazon spokesperson Kelly Nantel stated, “AI is not the reason behind the vast majority” of layoffs, emphasizing that the focus is on “reducing layers, increasing ownership, and easing bureaucracy.”

Goldman Sachs declined to comment, while Morgan Stanley did not respond to requests for input.

Accuracy Checks

WARN filings are designed to provide state agencies with advance notice of layoffs so they can enhance services to support quick job placement. Companies face daily fines of $500 for failing to comply with filing mandates.

Kristin Devoe, a spokesperson for the governor, mentioned that the Department of Labor follows up with every employer to verify the accuracy of their filings. For example, Amazon reported “economic” reasons for layoffs, explaining to the department that employees hired during the pandemic to address surges in online shopping were no longer necessary.