“They’re going to know that if they can cut headcount due to AI and increase profit, stocks are going to go up,” Nurani said. “Publicly traded companies have fiduciary duties to the stockholders, because they need to maintain, protect, and increase profit. I think that you’re going to see a waterfall of layoffs happen throughout the rest of this quarter and into the next quarter.”
The combination of the fact that these are higher-paying jobs being eliminated, with a potential negative impact on the job market as a whole, could lead the Federal Reserve to ease rates.
“It’s going to have adverse impacts on unemployment,” Nurani said. “That will give some credence to using monetary policy at the Fed. More importantly, those jobs that are being eliminated from the market are white-collar jobs. These are not $35,000 a year jobs. These are significantly higher wages that are being eliminated from the economy, which inherently is going to hurt tax revenue, which inherently is going to have an impact on our employment market.”
During the COVID-19 pandemic, there was an increase in unemployment, but many of the jobs were going to return once things returned to normal. Nurani said it’s a totally different situation with AI-related job losses.
“There’s no exit ramp,” he said. “When you saw jobs disappear during COVID, we knew that those jobs were coming back to the market. Everybody knew that. Eventually, we will return to a normal world, and those jobs will return. This is different. These jobs are not coming back to the market. Every company is saying, ‘I can solve this problem with AI as opposed to human capital.’”
