The AI jobs crisis is here, now
It's not coming, it has already arrived.
On Monday, April 29th, Luis von Ahn, the billionaire CEO of the popular language learning app Duolingo, made a public announcement that his company is officially "going to be AI-first.” Duolingo, von Ahn wrote in an email to all employees that was also posted to LinkedIn, will “gradually stop using contractors to do work that AI can handle.” The CEO took pains to note that “this isn’t about replacing Duos with AI.”
According to one such Duolingo contractor, this is not accurate. For one thing, it’s not a new initiative. And it absolutely is about replacing workers: Duolingo has already replaced up to 100 of its workers—primarily the writers and translators who create the quirky quizzes and learning materials that have helped stake out the company’s identity—with AI systems. Duolingo isn’t “going to be” an AI-first company; it already is. The translators were laid off in 2023, the writers six months ago, in October 2024.
“It was very sudden when it happened,” the worker, a writer who spent years working at the company, told me on the condition of anonymity. They said it was “shocking” when they got the news. “We had been working with their AI tool for a while, and it was absolutely not at the point of being capable of writing lessons without humans.” They’d been told to stop working new content to help train the system, the writer says.
“If you had asked me a year ago, I would have told you that my job would become more and more editing AI content,” the writer told me. “I did not expect to be replaced so soon.”
This is a glimpse of the AI jobs crisis that is unfolding right now—not in the distant future—and that’s already more pervasive than we might think. Before we dig in further, Blood in the Machine is a 100% reader-supported publication. Its existence depends entirely on the paying subscribers who chip in a few bucks a month, or $60 a year, so I can do this reporting and writing. If you can, please do consider becoming a paid supporter—many thanks, I’m so grateful to all of you.
The Duolingo writer is far from alone. Almost every professional artist or illustrator I meet tells me they have lost clients and gigs to firms that have turned to AI instead of paying for human work; some have been pushed out of their fields altogether. I’ve written for WIRED about managers who are using AI to displace artists and designers in the video game industry. Voice actors have been on strike for 9 months now, seeking protections from corporations that would use AI to clone their voices. Just this week, the popular gaming website Polygon was sold off to the content farm Valnet that’s often accused of running AI-generated articles—almost all of Polygon’s human staff was fired.
It’s unclear whether these kinds of layoffs are enough to register in the economic data, though there are signs it is. Writing in the Atlantic this week, business journalist and abundist Derek Thompson points to an alarming phenomenon in the job market: The unemployment rate for recent college graduates is unusually high—and historically high in relation to the general unemployment rate. Why might that be? One theory: Firms are hiring fewer grads into white collar jobs, and using more AI. “When you think from first principles about what generative AI can do, and what jobs it can replace, it’s the kind of things that young college grads have done,” as the Harvard economist David Deming told Thompson.
Young grads are typically among the easiest to employ; they’re skilled, ambitious, and will work for cheap. Yet the recent grad-gap—the “difference between the unemployment of young college graduates and the overall labor force”—is higher than it’s been in four decades. Thompson points to the following graph, made with data from the US Census Bureau and the Bureau of Labor Statistics:
Here’s Thompson:
The strong interpretation of this graph is that it’s exactly what one would expect to see if firms replaced young workers with machines. As law firms leaned on AI for more paralegal work, and consulting firms realized that five 22-year-olds with ChatGPT could do the work of 20 recent grads, and tech firms turned over their software programming to a handful of superstars working with AI co-pilots, the entry level of America’s white-collar economy would contract.
Furthermore, as Thompson and others have noted, the Trump tariffs and trade wars could exacerbate the situation. Recessions hand more power to employers, who at least threaten and sometimes do invest in automation technologies like enterprise AI. “And even if employers aren’t directly substituting AI for human workers,” Thompson notes, “high spending on AI infrastructure may be crowding out spending on new hires.”
One of the biggest questions—perhaps the big question—that has persistently circled the AI boom is how it will impact our working lives and jobs more broadly. Will AI lead to a jobs crisis? Poll after poll has found that it’s the top concern that people have with AI: That AI will take jobs and make our working lives worse. To an extent, the big AI companies encourage this line. OpenAI, Anthropic, and its competitors are selling a brand of automation software whose key value proposition is that it can replace tasks and workers to slash labor costs.
Well, I have bad news. The AI jobs crisis has arrived. It’s here, right now. It just doesn’t look quite like many expected it to.
The AI jobs crisis does not, as I’ve written before, look like sentient programs arising all around us, inexorably replacing human jobs en masse. It’s a series of management decisions being made by executives seeking to cut labor costs and consolidate control in their organizations. The AI jobs crisis is not any sort of SkyNet-esque robot jobs apocalypse—it’s DOGE firing tens of thousands of federal employees while waving the banner of “an AI-first strategy.”
The AI jobs crisis is not the sudden displacement of millions of workers in one fell swoop—instead, it’s evident in the attrition in creative industries, the declining income of freelance artists, writers, and illustrators, and in corporations’ inclination to simply hire fewer human workers.
The AI jobs crisis is, in other words, a crisis in the nature and structure of work, more than it is about trends surfacing in the economic data. The AI boom, driven by OpenAI and Silicon Valley’s relentless talk of AGI and promotion of enterprise AI software and AI influencers enthusing over endless productivity gains, has been a powerful enabler of corporate automation and cost-cutting imperatives. These imperatives have always existed, of course; bosses have historically tried to maximize profits by using cost-cutting technologies. But generative AI has been uniquely powerful in equipping them with a narrative with which to do so—and to thus justify degrading, disempowering, or destroying vulnerable jobs.
DOGE is a good example. Elon Musk and the Trump administration’s project to hollow out the federal workforce is fueled by “AI-first strategies” and obtuse descriptions of algorithms and efficiency; it’s presented as a cost-cutting initiative aimed at generating efficiencies—yet it’s destroying livelihoods en masse and eroding institutional knowledge.
Patrick Kigongo, a former employee of 18F—the widely respected government agency that provided digital services across the federal government before it was dismantled wholesale by DOGE—says that this is essentially what the agency is doing. “They’re pointing at the AI hype machine and trying to apply that to government,” he said at a meeting of federal workers and academics resisting AI and DOGE in Washington DC. “They’re overpromising and doomed to underdeliver. The AI tools they’re promoting do not exist yet.”
DOGE is empowered by the logic of a generative AI enterprise product. It promises efficiency and techno-solutionism, but delivers results that are unreliable at best, and dangerous at worst. Consider DOGE’s laying off of nuclear regulators by mistake before recalling them back to work. Or its winnowing of federal food safety inspectors, soil surveyors, consumer protection advocates. Or its gutting of NASA, of the CDC, of the funding for scientific research everywhere, while Musk installs StarLink in the White House and positions his companies to pick up more state contracts.
This is the AI jobs crisis. It’s DOGE boosting its chatbots, cost-cutting algorithms and hastily installed AI systems designed to replace personnel and the administering of regulations, while eliminating tens of thousands of federal workers, technologists, scientists, and civil servants.
More broadly applied, the AI jobs crisis is billionaires, executives, and managers are using the gen AI logic to take aim at these kinds of jobs with renewed vigor; ie, those jobs that do not exist expressly to help them maximize profits.
I’ve been rereading the late anthropologist David Graeber’s Bullshit Jobs, which persuasively makes the case that the corporate world is happy to nurture inefficient or wasteful jobs if they somehow serve the managerial class or flatter elites—while encouraging the public to harbor animosity at those who do rewarding work or work that clearly benefits society. I think we can expect AI to accelerate this phenomenon, and to help generate echelons of new dubious jobs—prompt engineers, product marketers, etc—as it erodes conditions for artists and public servants.
A common refrain about modern AI is that it was supposed to automate the dull jobs so we could all be more creative, but instead, it’s being used to automate the creative jobs. That’s a pretty good articulation of what lies at the heart of the AI jobs crisis. Take the former Duolingo worker who was laid off as part of the company’s pivot to AI.
“So much will be lost,” the writer told me. “I was a content writer, I wrote the questions that learners see in the lessons. I enjoyed being able be creative. We were encouraged to make the exercises fun.” Now, consider what it’s being replace with, per the worker:
“First, the AI output is very boring. And Duolingo was always known for being fun and quirky. Second, it absolutely makes mistakes. Even on things that you would think it could get right. The AI tools that are available for people who pay for Duolingo Max often get things wrong—they have an ‘explain my mistake’ tool that often will suggest something that’s incorrect, sometimes the robot voices are programmed to speak the wrong language.”
This is just a snapshot, too. This is happening, to varying degrees, to artists, journalists, writers, designers, coders—and soon, perhaps already, as Thompson’s story points out, it could be happening to even more jobs and lines of work.
Now, it needs to be underlined once again that generative AI is not yet the one-size-fits-all agent of job replacement its salesmen would like it to be—far from it. A recent SalesForce survey reported on by the Information show that only one-fifth of enterprise AI buyers are seeing good results, and that 61% of respondents report a disappointing return on investment for AI or even none at all.
Generative AI is still best at select tasks that do not require consistent reliability—hence its purveyors taking aim at art and creative industries. But all that’s secondary. The rise of generative AI, linked as it is with the ascent to power of the American tech oligarchy, has given rise to a jobs crisis nonetheless.
We’re left at a crossroads where we must consider nothing less than what kind of jobs we want people to be able to do, what kind of work and which institutions we think are important as a society, and what we’re willing to do to protect them—before the logic of generative AI and the jobs crisis it has begotten guts them to the bone, or devours them altogether.
That’s it for now — as noted above, I’m currently in Washington DC for a great event put on by the American Association of University Professors, the MIC Center, and the Rutgers' Power and Inequality Working Group, aimed at fighting DOGE and the expansion of AI in academia. I have a huge pile of stories to get to, and lots of great and terrifying and bleak stuff in store. Thanks as always for reading — hammers up.
Thank you for putting words to what I’ve been fuming about all morning. I thought I had certifiably lost my mind as the sole person concerned about all of this in my inner circles.
Went through this 20 years ago when speech recognition software swept the medical field. I went from transcriptionist to SR editor to unemployed in about 5 years, each change with a corresponding decrease in pay. Corporations are about money. Employees/contractors will always be collateral damage, no matter what the higher-ups say. My best advice is to be hyper-vigilant about what your medical and legal documents say, because there will always be errors. Corps don't give a shit.