Artificial Intelligence Is in Charge of Making the Layoff Decisions in the Tech industry
Hundreds of former Google employees flocked to an online chatroom days after Layoff decisions that made Artificial Intelligence the reason for mass layoffs that eliminated 12,000 jobs. “Could a ‘mindless algorithm carefully design not to violate any laws’ have decided who got the axe”, one Discord user wondered. The Washington Post was unable to independently confirm.
In the tech industry, Google claims that “no algorithm was involved” in making layoff decisions. Former employees are not wrong to be concerned, as a slew of artificial intelligence tools become ingrained in the workplace. Human resource managers use machine learning software to analyze millions of employment-related data points to make recommendations on whom to interview, hire, promote, or assist in retaining.
However, as Silicon Valley’s fortunes change, that software is likely to face a more difficult task: deciding who gets laid off, according to human resources analysts and workforce experts.
According to a January survey of 300 human resource leaders at U.S. companies, 98% believe software and algorithms will assist them in making layoff decisions this year. And, as companies lay off large numbers of employees — with cuts in the five digits — it’s difficult for humans to execute alone.
Big firms, from technology titans to companies that make household goods often use software to find the “right person” for the “right project,” according to Joseph Fuller, a professor at Harvard’s business school who co-leads its ‘Managing the Future of Work’ initiative.
These products create a “skills inventory,” a powerful database of employees that assists managers in determining what work experiences, certifications, and skill sets are associated with high performers for various job titles.
These same tools can be useful during layoffs. “They’re just being used differently,” Fuller explained, “because that’s where people have… a real… inventory of skills.”
Human resource firms have benefited from the artificial intelligence boom. Companies like Eightfold AI use algorithms to analyse billions of data points scraped from online career profiles and other skills databases, assisting recruiters in finding candidates whose applications would otherwise go unnoticed.
Human resources departments have become “incredibly data-driven” since the 2008 recession, according to Brian Westfall, a senior HR analyst at Capterra, a software review site. Using algorithms can be especially comforting for some managers when making difficult decisions like layoffs, he added.
Many people use performance data analysis software. In Capterra’s survey, 70% of HR managers said performance was the most important factor in deciding whom to lay off.
Other metrics used to lay people off may be less clear, according to Westfall. HR algorithms, for example, can determine what factors make someone a “flight risk,” or more likely to leave the company.
He stated that this raises several issues. If a company has a problem with discrimination, for example, people of colour may leave at a higher rate; however, if the algorithm is not trained to recognise this, it may consider non-White workers a higher “flight risk,” and suggest more of them for layoffs, he added.
“You can kind of see where the snowball starts rolling,” he explained, “and all of a sudden, these data points where you don’t know how that data was created or influenced suddenly lead to poor decisions.”
Jeff Schwartz, vice president of Gloat, an AI-powered HR software company, says his company’s software works like a recommendation engine, similar to how Amazon suggests products and helps clients decide whom to interview for open positions.
He doesn’t believe Gloat’s clients are using the company’s software to create layoff lists. However, he acknowledged that HR leaders must be open about how they make such decisions, including the extent to which algorithms are used.
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