Latest / ELECTE's Podcast: AI Frontiers / Layoffs Make Noise. Hiring Stops in Silence.

Transcript

Layoffs Make Noise. Hiring Stops in Silence. · ELECTE's Podcast: AI Frontiers

• 0:00
  SPEAKER_00: In the latest issue, I debunked the narrative of AI-driven layoffs in the US market.
• 0:04
  SPEAKER_00: Oracle is cutting 3,000 jobs not because of artificial intelligence, but due to$108 billion in debt.
• 0:11
  SPEAKER_00: Amazon announced 3,000 fewer jobs, yet filed a financial statement with the SEC showing$51,000 more employees.
• 0:18
  SPEAKER_00: The New York Federal Reserve confirms only 1% of service companies have actually laid off employees due to AI.
• 0:25
  SPEAKER_00: 12% have hired fewer people.
• 0:28
  SPEAKER_00: Jobs disappear and reappear under a different name.
• 0:31
  SPEAKER_00: SAP restructured 10,000 positions, yet its workforce grew by 2371, because in the meantime it hired in research and development, cloud computing, and artificial intelligence.
• 0:43
  SPEAKER_00: The people who held those 10,000 jobs are not the same ones filling the new ones.
• 0:47
  SPEAKER_00: The restructuring is real.
• 0:49
  SPEAKER_00: Blaming AI for the layoffs is not.
• 0:52
  SPEAKER_00: Today I'm bringing those numbers to Europe.
• 0:54
  SPEAKER_00: And the response is more uncomfortable than I thought.
• 0:58
  SPEAKER_00: In Europe, AI doesn't destroy jobs.
• 1:02
  SPEAKER_00: It eliminates entry-level positions.
• 1:05
  SPEAKER_00: Three things to know before continuing.
• 1:07
  SPEAKER_00: Large European companies do not make staff redundant because of AI.
• 1:12
  SPEAKER_00: They simply stop hiring and let natural turnover take its course.
• 1:16
  SPEAKER_00: Two, AI boosts productivity by 4%, but only in medium-sized and large firms.
• 1:22
  SPEAKER_00: SMEs do not reap the benefits but suffer the consequences.
• 1:26
  SPEAKER_00: 3.
• 1:27
  SPEAKER_00: First time recruitment in the European tech sector has plummeted by 73% in a year.
• 1:32
  SPEAKER_00: Not job cuts.
• 1:34
  SPEAKER_00: Jobs that were never created in the first place.
• 1:37
  SPEAKER_00: Headlines are misleading in Europe too.
• 1:40
  SPEAKER_00: SAP announced an AI-related restructuring in January 2024.
• 1:44
  SPEAKER_00: Initially 8,000 jobs and 2 billion, later expanded to around 10,000 jobs and 3, 2 billion.
• 1:50
  SPEAKER_00: Headlines in every publication, SAP cuts thousands of jobs for artificial intelligence.
• 1:55
  SPEAKER_00: The 20F filing with the SEC workforce from 107602, December 2023 to 109973, December 2024, an increase of 2,371 employees.
• 2:09
  SPEAKER_00: Growth was concentrated and a quote from the filing.
• 2:12
  SPEAKER_00: Primarily in the areas of research and development and cloud.
• 2:16
  SPEAKER_00: The jobs cut were operational and administrative.
• 2:22
  SPEAKER_00: 11,000 cuts announced.
• 2:24
  SPEAKER_00: Average workforce rose from 858-87 to 87205 up 15%.
• 2:29
  SPEAKER_00: Company 2022 3224 net change meanwhile.
• 2:54
  SPEAKER_00: No is 294, 326 to 536%, crollo del mercato 5G, non-AI, where staff numbers have actually fallen at Nokia and Ericsson.
• 3:06
  SPEAKER_00: The driving force isn't artificial intelligence.
• 3:09
  SPEAKER_00: It's the 5G cycle, falling demand, and shrinking margins.
• 3:13
  SPEAKER_00: AI is just the label they're slapping on it.
• 3:16
  SPEAKER_00: How to cut costs without making redundancies?
• 3:19
  SPEAKER_00: The best documented case is Klarna, the F1 filing with the SEC in March 2025, 5527 employees at the end of 2022, 4352 at the end of 2023, 3422 at the end of 2024, by the end of 2025, approximately 2907, almost half the workforce gone in three years, without a single redundancy.
• 3:42
  SPEAKER_00: CEO Sebastian Semyakowski said it openly.
• 3:45
  SPEAKER_00: We simply told our employees that we would stop hiring.
• 3:48
  SPEAKER_00: Natural turnover in a company like ours is 15-20% a year.
• 3:52
  SPEAKER_00: The figure is confirmed.
• 3:54
  SPEAKER_00: The average turnover rate in the European tech sector in 2025 is 17.4%.
• 4:00
  SPEAKER_00: If you stop hiring and let people leave of their own accord, you lose a sixth of your workforce every year.
• 4:06
  SPEAKER_00: The accounting advantage is decisive.
• 4:08
  SPEAKER_00: A hiring freeze does not trigger IS 37 provisions, does not require consultation with trade unions, and does not generate disclosure obligations.
• 4:17
  SPEAKER_00: No visible costs, no newspaper headlines.
• 4:21
  SPEAKER_00: For a recent graduate, this means one thing and one thing only.
• 4:26
  SPEAKER_00: The position they are applying for hasn't been cut.
• 4:29
  SPEAKER_00: It was never advertised in the first place.
• 4:32
  SPEAKER_00: Why Europe is different from the United States, two structural differences give rise to opposing dynamics that lead to the same outcome.
• 4:40
  SPEAKER_00: Employment protection in America, the at-will contract allows for rapid dismissal and rehiring.
• 4:46
  SPEAKER_00: The cycle is clear.
• 4:47
  SPEAKER_00: Acquisition, restructuring, financial results.
• 4:50
  SPEAKER_00: In Europe, the OECD Employment Protection Index gives Italy a score of two.
• 4:55
  SPEAKER_00: Nine out of six, France two, seven and Germany two.
• 4:59
  SPEAKER_00: Three, the United States, one, three.
• 5:01
  SPEAKER_00: Dismissal costs more, takes longer, and requires formal procedures.
• 5:05
  SPEAKER_00: The OECD describes the result in its 2020 report.
• 5:09
  SPEAKER_00: Strict regulation tends to reduce dismissals, but it also tends to reduce hiring.
• 5:15
  SPEAKER_00: The consequence is counterintuitive.
• 5:17
  SPEAKER_00: Aggregate employment is unaffected, but labor mobility is not.
• 5:21
  SPEAKER_00: Those who have a job keep it, those who don't struggle to get one.
• 5:25
  SPEAKER_00: Kahuck and Paladino, 2024, put it bluntly.
• 5:29
  SPEAKER_00: Employment protection creates a segmentation that disproportionately affects those entering the labor market for the first time.
• 5:36
  SPEAKER_00: If you are an entrepreneur, this means that the Klarna model, don't hire, wait, is the rational strategy under European labor law.
• 5:44
  SPEAKER_00: If you are a parent with a child graduating in engineering, this means that the labor market awaiting them is structurally different from that of five years ago.
• 5:53
  SPEAKER_00: The AI adoption rate, according to Eurostat data from 2025, 55% of large European companies use AI, compared with 17% of small ones.
• 6:04
  SPEAKER_00: OECD data, 40% of those with over 250 employees, 11, 9% of those with between 10 and 49, it is the widest gap among all digital technologies.
• 6:15
  SPEAKER_00: Large enterprises are quietly restructuring through workforce turnover, reaping efficiency gains and boosting margins.
• 6:22
  SPEAKER_00: SMEs do not capture those benefits, but they inherit the effects on the labor market.
• 6:28
  SPEAKER_00: In the United States, the cost of restructuring appears on the balance sheet.
• 6:32
  SPEAKER_00: In Europe, it is externalized.
• 6:35
  SPEAKER_00: It falls on those who are not hired and does not appear anywhere.
• 6:38
  SPEAKER_00: In the United States, the contradiction lies between the title and the budget.
• 6:44
  SPEAKER_00: In Europe, there isn't even a title.
• 6:47
  SPEAKER_00: Down 73% in a year, the aggregate data paints a reassuring picture.
• 6:53
  SPEAKER_00: The ECB survey from March 2026 confirms that companies using AI are 4% more likely to hire.
• 7:00
  SPEAKER_00: The EIBBIS report, based on 12,000 businesses, confirms a 4% increase in productivity without any negative impact on employment.
• 7:09
  SPEAKER_00: But the aggregate data hides what is growing and what is disappearing.
• 7:13
  SPEAKER_00: AI is not causing the mass redundancies that the newspapers report.
• 7:17
  SPEAKER_00: We have seen that.
• 7:18
  SPEAKER_00: But it is deciding which jobs are created and which are not.
• 7:22
  SPEAKER_00: And here the figures change completely.
• 7:25
  SPEAKER_00: Ravio's data on the European technology market in 2025, year on year change AI ML recruitment, plus 188% professional qualifications containing AI 0.578%, first time recruitment, P1P2, 73.4%, administrative recruitment, 35.5% AI-related roles are growing at all levels, including entry-level positions.
• 7:51
  SPEAKER_00: And the roles that are disappearing are not just junior ones.
• 7:54
  SPEAKER_00: Administrative and coordination roles are being cut at every level of seniority, but the net balance is lopsided.
• 8:00
  SPEAKER_00: The overall decline in hiring in the European tech sector is 7%.
• 8:04
  SPEAKER_00: At the P1, P2 level, entry level positions, it is 73%.
• 8:10
  SPEAKER_00: The roles most affected at entry level, marketing, hiring rate down 75-6%, human resources down 72, 3%, and junior engineering down 72, 2%.
• 8:22
  SPEAKER_00: 50% of remuneration managers surveyed by Ravio cited AI as the reason they can be automated.
• 8:28
  SPEAKER_00: Meanwhile, those with AI skills receive a 23% pay premium compared to equivalent profiles without those skills.
• 8:35
  SPEAKER_00: Oxford 10 million job adverts in the UK.
• 8:38
  SPEAKER_00: According to PWC, salaries in sectors exposed to AI are growing at twice the rate.
• 8:44
  SPEAKER_00: The jobs that AI creates are worth more, but in terms of volume, this does not compensate for the jobs it eliminates at the grassroots level.
• 8:53
  SPEAKER_00: In the UK, every graduate role receives 140 applications, the highest figure since 1991.
• 9:00
  SPEAKER_00: Jobs in the British tech sector have fallen by 46% in a year.
• 9:04
  SPEAKER_00: In the Netherlands, entry-level developer roles have dropped by almost 40%.
• 9:09
  SPEAKER_00: The jobs that AI creates are worth more.
• 9:12
  SPEAKER_00: The jobs that AI eliminates were the stepping stone to moving up.
• 9:17
  SPEAKER_00: Europe is not creating low quality jobs.
• 9:20
  SPEAKER_00: It is creating a workforce with no entry point.
• 9:24
  SPEAKER_00: The choice Europe doesn't realize it has made everything I have described so far concerns large corporations.
• 9:30
  SPEAKER_00: SAP, Vodafone, Klarna, Nokia, companies with thousands of employees and direct access to capital markets.
• 9:38
  SPEAKER_00: Contraction by omission is their mechanism.
• 9:41
  SPEAKER_00: The 73% figure is theirs.
• 9:43
  SPEAKER_00: But SMEs, 99% of Europe's business fabric, two-thirds of employment, are paying the consequences from a distance.
• 9:53
  SPEAKER_00: The pool of candidates with three to five years experience that an SME normally draws from is formed within large companies at the entry level.
• 10:01
  SPEAKER_00: If those positions are no longer being created, in three to five years that pool will be empty.
• 10:06
  SPEAKER_00: And even today, when an SME tries to recruit, it faces a problem that large companies can ignore.
• 10:12
  SPEAKER_00: AI has leveled everyone's output.
• 10:15
  SPEAKER_00: CVs, portfolios, and work samples are converging towards a uniform, indistinguishable quality.
• 10:21
  SPEAKER_00: What I called the B-put trap in my recent research.
• 10:25
  SPEAKER_00: You cannot tell who has actually learnt the ropes from who simply has a better chatbot.
• 10:30
  SPEAKER_00: Large companies filter candidates through multi-stage processes and dedicated recruitment budgets.
• 10:36
  SPEAKER_00: SMEs do not.
• 10:38
  SPEAKER_00: At this point, we might as well just hire someone at random.
• 10:42
  SPEAKER_00: Europe did not choose to destroy jobs.
• 10:45
  SPEAKER_00: It chose to protect those who already have them.
• 10:48
  SPEAKER_00: Job protection, designed to prevent people from losing their jobs, has had a side effect.
• 10:54
  SPEAKER_00: A market in which it makes sense not to hire, where the cost of restructuring falls on those who do not yet have a contract, and where no commonly cited data captures the full extent of this.
• 11:05
  SPEAKER_00: The result is a figure.
• 11:07
  SPEAKER_00: A 73% drop in first-time hires over the course of a year across Europe.
• 11:13
  SPEAKER_00: The decline is not in redundancies, it is in the jobs that are never created.
• 11:17
  SPEAKER_00: In recent graduates who send out 140 applications and do not realize that the problem is not their lack of suitability.
• 11:24
  SPEAKER_00: It is that the position simply no longer exists.
• 11:28
  SPEAKER_00: It does not concern only them.
• 11:31
  SPEAKER_00: It concerns the European economy's ability to produce the next generation of managers, entrepreneurs, and innovators.
• 11:38
  SPEAKER_00: If the first rung doesn't exist, neither does the latter.
• 11:43
  SPEAKER_00: This article is the second in a series on how artificial intelligence is reshaping the operational architecture of businesses.
• 11:50
  SPEAKER_00: The first installment, Anatomy of an AI-driven redundancy, Analyses of the U.S.
• 11:57
  SPEAKER_00: Market.
• 11:57
  SPEAKER_00: For a more in-depth operational analysis, architecture, costs, implementation roadmap.
• 12:04
  SPEAKER_00: See the white paper, AI for European SMEs, the 2026 playbook.
• 12:10
  SPEAKER_00: Fabio Laure, CEO and founder, Electe Every Week.
• 12:13
  SPEAKER_00: We explore AI without the hype with data analysis and an independent perspective.
• 12:18
  SPEAKER_00: Sources, SAPSE 20F 2024, SEC filing, FEB 2025, Vodafone Group, FY 2025, Annual Report, Light Reading, Erickson, Nokia, ASML 2024, Annual Reports.
• 12:32
  SPEAKER_00: Klarna, F1 filing with the SEC, 14th of March 2025, Statements by Semyotkowski, Bloomberg, May 2025, Ravio, Tech Job Market Report 2025, Compensation Trends 2026, Institute of Student Employers, ISE, 2024-25 Graduate Survey, Stephanie et al.
• 12:52
  SPEAKER_00: 2026, University of Oxford Skills Scale Project, PWC, 2025, Global AI Jobs Barometer, OECD, Employment Protection Index for Refor Employment Outlook 2020, AI Adoption by SMEs 2025, CAHOOK and Paladino 2024, ISA Discussion Paper, Number of Stouncing 747.
• 13:12
  SPEAKER_00: ECB, Safe Survey, 4 March 2026.
• 13:15
  SPEAKER_00: EIB, Working Paper, 202602, Aldasoro et L.
• 13:20
  SPEAKER_00: Eurostat, AI Adoption and EU Enterprises, Deck 2025, Carnegie Endowment, How Europe Can Survive the AI labor transition, Feb 20, 2026, sifted.
• 13:31
  SPEAKER_00: European tech companies slash entry level jobs as AI demand surges.
• 13:35
  SPEAKER_00: June 20, 2025.
• 13:37
  SPEAKER_00: Subscribe now.