Is artificial intelligence really the cause of our job problems? Not yet ...

There is a serious concern that with the advancement of (AI), entry level job seekers are doomed. However, the more I’ve spoken with employers across the continent, it has become clear that we are not dealing with an AI problem. Instead, we’re dealing with a change in investment philosophy that is leading to a shift in the fundamental strategy behind technology’s rapid growth.

Employees are expressing sweeping concerns about the impact of AI on their jobs. We’re seeing new terms like FOBO, or fear of becoming obsolete, enter our lexicon. It’s natural to feel this way. In fact, 74 per cent of Canadian (both employed and unemployed) job seekers do, expressing concern that generative AI may replace them.

This concern has only escalated with the . The recent firing and subsequent re hiring of OpenAI CEO Sam Altman has sparked conversations about the potential consequences of superintelligent systems. This fall, the federal government launched a voluntary code of conduct for the responsible use of AI.

In the U.S., President Joe Biden recently issued an executive order for AI, in part to mitigate the harms of AI for workers and address job displacement. While prudent, most of this will be addressing future iterations of AI, as the reality is that AI is not taking people’s jobs ... yet. There is no denying that companies are trying it as a job replacement, but up until now it has been relatively unsuccessful.

The reason they are trying this hard is the fundamental shift in how technology companies grow and value themselves — from the startup to the enterprise stage. Let’s take a step back. The reality is that AI has the potential to boost productivity. At the beginning of the pandemic, investors heavily funded tech companies with the expectation of rapid growth, prioritizing expansion and speed over profitability.

If AI had arrived during that period, we would be talking about the potential to accelerate company builds, not the threat to junior jobs. Instead, companies entered a talent war and hired an abundance of employees at inflated salaries. Since then, a number of factors, underscored by rising interest rates, have shifted investment strategies.

Companies previously valued at $100 million missed a couple of targets and almost immediately were pressured to turn a profit to justify that valuation. That pressure to achieve profit is what led to a rapid increase of layoffs in 2023 and will likely lead to more in 2024. Companies had to rightsize on a new standard.

Over the past decade, a combination of low interest rates, consumer confidence and a growing pool of educated professionals encouraged a healthy business ecosystem. This environment incentivized tech companies to take business risks that they are now struggling with, and there is an increased urgency for companies to deliver profitability.

This change in philosophy means there’s not a lot of room for hiring, and what’s left is a massive group of people on the market. Amazon, Google and Shopify are not going bankrupt. They laid people off because they needed to drive more profitability. It’s as simple as that. The tides have shifted.

Don’t get lost at sea. This is where AI comes into play. AI is a powerful tool that has the ability to streamline administrative tasks and simplify decision making. The reconciliation tech companies now face between growth and profit offers the opportunity to re evaluate business models and focus on achieving profitability, while harnessing the technology’s potential.

Many companies can’t afford to hire right now, but if they use AI, maybe they’ll be more productive. They’re not using AI to replace juniors, they’re simply using AI to get the most out of the teams they currently have and hit inflated goals. The important thing to keep in mind is that there are still more roles than people with the talent to fulfil them.

This overcorrection has led to an abundance of talent searching for homes while companies are under pressure to not hire, but that will change, because it’s not sustainable. The importance of entry level jobs cannot be overstated. Schools and training can provide the skills necessary to succeed in the job, but to meet the talent needs of the next decade, there will be a need for a constant influx of talent.

As the backbone of all industries, the entry level market provides individuals with a pathway to gain experience and develop skills. A healthy job market relies on varying degrees of seniority to succeed. Entry levels jobs are here to say — just not in the way they have been existing. Technology companies will need to continue acclimating to the demands of innovation, and juniors will have to pivot to new territory.

But, at the end of the day, AI is not yet useful without humans attached to it. Instead, we should all watch how the change in investment and tech growth philosophy impacts innovation and the job market..