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When Fidelity Investments announced a workforce restructuring last week, the Boston company was adamant: artificial intelligence played no role in its decision to cut about 1,000 employees.
The financial services behemoth stood out from a growing list of companies — Amazon, Block, and Meta among them — that have been quick to cite AI as the reason for axing thousands of jobs. They claim rapidly evolving chatbots and AI agents are allowing them to do more with fewer people.
Perhaps more surprising was that the family-controlled company led by Abigail Johnson also plans to hire 2,000 early-career workers — the very type of workers considered most vulnerable to AI displacement.
Overall, Fidelity, which employs more than 80,000 people worldwide, is aiming to add 3,300 new jobs this year in addition to filling 2,000 open positions even as it pares its senior leadership ranks.
Why it matters: Fidelity’s hiring priorities show that AI can’t meet all of its immediate development requirements.
The company has been incorporating AI into its operations for years, but it needs real-world techies and other hands-on workers to roll out key products and services right now.
“The problem with AI is that there is a massive supply bottleneck [even though] they are slapping up data centers as fast as they can,” said Boston College economist Brian Bethune. Without sufficient data center computing power, businesses can struggle to build AI-powered applications for everyday use.
“Some companies may be shifting back to hiring smart, bushy-tailed [computer science] grads to move things forward instead of waiting in the AI queue,” he said.
The big picture: The issue, of course, is what happens in a year or two, and there’s widespread concern that AI will be a job killer.
Seventy-one percent of employed white-collar workers and 73 percent of blue-collar workers expect AI advancements to lead to a decrease in job openings, according to a March Quinnipiac University poll.
Their fears aren’t unfounded.
Dario Amodei, CEO of Anthropic, which makes the Claude chatbot, predicted a year ago that AI could eliminate up to half of all white-collar jobs within five years, with entry-level positions especially vulnerable. Ford Motor chief executive Jim Farley issued the same forecast in July.
In February, when Block, the parent of Square, cut 40 percent of its workforce, CEO Jack Dorsey said he made the move rather than dragging out layoffs as the company inevitably increased its AI use.
“Something has changed,” he wrote on social media. “We’re already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company.”
In March, layoffs in the information sector — which includes many tech jobs, as well as those in media and telecommunications — rose to 66,000, according to the most recent data from the Bureau of Labor Statistics, the highest level since the pandemic. The sector has shed 342,000 positions — 11 percent of the total — since reaching a peak in November 2022.
To be sure: Companies like Block could very well be engaging in “AI washing” — using AI as an excuse to cover up for over-hiring during the pandemic, competitive pressures, or plain bad management.
And every new wave of breakthrough technology — from the Industrial Revolution to the internet — has sparked talk of mass unemployment that never became reality. Instead, occupations highly exposed to new technology have seen painful job losses, even as jobs in different sectors were created, productivity rose, and the economy as a whole expanded.
Final thought: Prior tech innovations replaced physical labor and some routine cognitive work.
Anthropic, OpenAI, Google, and others are building AIs that target high-knowledge tasks — not just in software development, but in medicine, law, finance, and, yes, journalism. There’s no precedent for such potentially widespread job disruption.
AI may yet dramatically remake the workforce. But companies such as Fidelity can’t wait. They have work to get done now.
Larry Edelman can be reached at larry.edelman@globe.com.