AI Not Affecting Job Market Much So Far, New York Fed Says

Market hiccups? Use a pandemic panic to justify printing a ton of money.

Printed too much money? Distribute it to the "right" people through a hiring frenzy, personnel you totally need in order to build a metaverse or whatever.

Money ran out + overleveraging during the boom + market changes caused by the rapid socioeconomic shifts (e.g., commercial real estate tanking)? You can cover the bottom line for now with a lot of firing and consolidation, say it's AI's fault.

And why not? It benefits them. I get it. But lets be real about it.

This. Better to tell markets "we can now downsize our workforce due to incredible efficiencies achieved by our AI initiative" than "we hired too many people, grew slower than expected and now we're making cuts"

And Brian Armstrong at Coinbase

I'm in a small growing tech company and I can say as a matter of fact that in a world without AI we would have made several hires in the past 18 months. Because of LLMs and agents my team doesn't have the need to bring more people in. It's as simple as that.

Isn't that precisely what all publicly traded companies want to say, and are often saying? I feel like I read a new headline of some sociopathic CEO bragging about how many people he managed to lay off thanks to AI every day.

> Salesforce forecast third-quarter revenue below Wall Street estimates on Wednesday, signaling lagging monetization for its highly-touted artificial intelligence agent platform as clients dial back spending due to macroeconomic uncertainty.

> The cloud software provider also announced a $20 billion increase to its existing share buyback program, but that was unable to allay investors' concerns, sending Salesforce's shares down over 5% in extended trading.

A company that was tuned to double revenue in 3 years transforming in one expecting to double in 9 years is definitely carrying too many people. It made sense for them to reduce headcount to align with their much slower growth curve.

Side note: Benioff also said earlier this year that they were done hiring programmers because AI. I'll let their careers page put the lie to that.

Salesforce reduced their headcount in 2023 by 8-10%. Another reduction by 5% attributed solely to AI could be a half truth and the reality could simply be Salesforce driving an efficiency agenda.

Personally, I believe it will take a few more years for systems to be built. Once those systems are in place, then headcount reductions are going to come fast and wide. Or putting it simply think of it as exponential growth. Currently AI job displacements are small, but it's growing, and will continue accelerating in its growth.

I wouldn't necessarily pay that much attention to what the CEO _says_.

> The New York Fed blog noted that the modest impact on jobs so far may not hold in the future. "Looking ahead, firms anticipate more significant layoffs and scaled-back hiring as they continue to integrate AI into their operations," New York Fed researchers wrote.

The data about new grads not being hired isn't lying, but if AI is to blame we should be seeing a flood of data and stories on how roles X, Y and Z were obliterated by AI. But I have yet to see a single solid example, so I find it hard to believe it's a massive shift.

If anything, I would expect AI to be replacing older, expensive workers with young, tech-savvy workers who can put the AI to use. But that is clearly not the case.

Several medium sized studios I've talked with are bidding $50k for projects (eg. Netflix, HBO, Proctor & Gamble are typical clients) they used to bid $400k on, and they're winning more contracts. They don't need to shoot in person in Venice for pharma ads or animate elaborate TV show intros anymore.

This is having a huge impact to the fundamentals of how they do business. They haven't laid anyone off yet, but they're talking about the ramifications if this gets cheaper.

Like how would some of this even work in reality? Can you go through those drive throughs and ask it to recite a sonnet about chicken nuggets? Clearly no, but then it begs the question of what the idea, the purported advance, even is here with much of this. Like we have had relatively advanced speech recognition for a while, I don't see the added utility or need of being able to go through the drive through and saying: "the number of hotdogs I want is a prime number that is more than 2 but less than 5."

It just feels so clearly silly if you stop and think about it for two seconds. So many hammers, not enough nails... We are just banging at walls at this point.

Is this actually worse than being on hold forever to talk to someone following a script?

> Some fast food places are replacing employees with an AI drive through.

What, as in it transcribes your order with Whisper and tries to upsell you through ChatGPT? One more reason I'm glad not to have a car-centric lifestyle, I guess. The kiosks inside the store might be vibe-coded now but at least I get a traditional UI that lets me specify things directly (even if the kitchen staff will ignore most requested customizations).

There's some AI involved at some retailers - I bought 2 identical items and the second wouldn't scan at the self checkout, so I grabbed the first item and scanned it again, and the camera-watching, object-detection system threw a fit (and played back the video of me). I had to call a human to complete my purchase. My suspicion is it is smart enough to detect that I moved an "unscanned" item from my basket item into the bagging area, but not smart enough to figure out I wasn't trying to cheat.

Don't forget hallucinating too.

Sure in the case of 3000 big macs it would be caught by the buyer or the cooks, but ordering 6 instead of 3 will not. This will cause complaints, complaints need more people to handle, etc.

When my Xbox 360 hit the red ring of death, I called in to Microsoft support and went through the flow to replace it with just pre-recorded responses and speech to text. This was in 2007.

You don't layoff what you don't hire, so ou can argue it "hasn't affected the job market" if hiring freezes are just that. Not growing, but not really declining either.

Evidence that AI is destroying jobs for young people - https://news.ycombinator.com/item?id=45121342 - Sept 2025 (313 comments)

AI adoption linked to 13% decline in jobs for young U.S. workers: study - https://news.ycombinator.com/item?id=45052423 - Aug 2025 (629 comments)