Recent High-Profile Cases of Job Reductions Amidst Company Growth
Last week, IBM dismissed 2,700 employees while its profits increased. Amazon eliminated 14,000 corporate positions after reporting record-breaking earnings. Salesforce reduced its support team from 9,000 to 5,000 because, according to its CEO, “it needs fewer heads” now that chatbots handle half of the inquiries. This is not a demand crisis; it’s what economists call jobless growth.
Understanding Jobless Growth: A Historical Perspective
Jobless growth describes a contradiction: GDP rises, companies gain profits, and markets reach historical highs, but employment stagnates or declines. It emerged after the 1990s recession in the United States, repeated following 2001 (taking 47 months to recover lost jobs), and after 2008, when the employment-to-population ratio fell from 64.3% to 58.1% and never recovered.
Why does this happen? Growth no longer brings jobs along. Economists measure this with the employment elasticity, which is the number of jobs created per percentage point of GDP growth. In the 1970s, it was close to 1.0 in India; today, it’s below 0.1. In advanced economies, it’s around 0.3; in emerging economies, it’s barely 0.1. Growth leaves workers behind.
The Role of Artificial Intelligence in Accelerating Jobless Growth
AI seems to be accelerating this trend. So far in 2025, the U.S. technology sector has eliminated over 140,000 jobs. In October alone, layoffs in the U.S. reached 153,074, the highest level in two decades. Goldman Sachs estimates that between 6% and 7% of the U.S. workforce could be displaced by AI in the coming years, and up to 300 million jobs worldwide.
This time, the jobs at risk are not routine or manual. They’re white-collar: customer service (80% is automatable), data entry, bookkeeping, legal assistants, analysts. Younger tech sector workers, aged 20 to 30, are already experiencing the consequences: their unemployment rate has increased by 3 percentage points since the beginning of 2025. This generates a significant problem of unemployment, both now and in the future.
Profit Concentration Amidst Jobless Growth
Meanwhile, profits are concentrating. Amazon’s net income increased more than 200% year-over-year in 2024, thanks to “AI-driven efficiencies,” while average wages rose by only 1.8%. In certain sectors, AI does seem to boost productivity: companies produce more with fewer resources. The issue is that these “fewer” are people who stop consuming, buying homes, or paying mortgages.
The Looming Impact on Future Recessions
The next recession could be brutal for employment. Goldman warns that in past recessions, employment in routine occupations fell sharply and did not recover. If companies now operate with fewer workers thanks to AI, layoffs will be massive and permanent. Jobless growth is not a future threat; it’s already reality.
Key Questions and Answers
- What is jobless growth? Jobless growth refers to a situation where the economy grows, companies make profits, and markets reach new highs, but employment stagnates or declines.
- Why is jobless growth happening? Growth no longer creates jobs at the same rate as before. This is measured by employment elasticity, which shows that for each percentage point of GDP growth, fewer jobs are created.
- How is AI contributing to jobless growth? AI is automating various white-collar jobs, such as customer service and data entry, leading to job losses despite overall economic growth.
- What are the potential consequences of jobless growth? As fewer people have jobs and income, there will be less consumption, which could negatively impact the economy in the long run.
