The tech sector experienced a staggering wave of layoffs, with 262,682 workers losing their tech jobs in 2023, compared to just 164,969 in 2022 according to layoffs.fyi. The trend also appears to be persisting into 2024, with over 35,000 tech layoffs already recorded as of 14 February. 

This trend has raised eyebrows in the community, as they grapple with the underlying dynamics causing the layoffs. Roland Rust, professor at the University of Maryland’s Robert H. Smith School of Business, shed light on an often overlooked aspect, the decline of ‘thinking’ jobs across the labour market, which he says is setting the stage for the emergence of what he terms the ‘feeling economy.’ 

According to Rust, the evolution of AI is reshaping the landscape of employment, relegating routine thinking tasks to machines and emphasising the importance of human qualities such as intuition, empathy, creativity, and interpersonal skills.

For example, in financial analysis, where humans were once tasked with intensive technical analysis, they now find themselves focusing more on client relationships and emotional reassurance, leaving the technical aspects to AI algorithms.

Similarly, customer service representatives have witnessed a transformation in their roles, with AI chatbots handling routine inquiries while human representatives tackle nuanced issues requiring judgement and empathy.

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“The Washington Post recently highlighted a person who gave up on tech and went back to school to study psychology. This is exactly what we predicted,” said Rust.

“We also suggested that universities cut back on pushing STEM, which has already peaked, in favour of training people to have better ‘people skills.’ Google, for example, did a big study of what factors led to career success there, and STEM skills came in last, while people skills came out on top.”

He concludes, “The accelerating improvement of AI is increasingly causing the loss of thinking jobs, such as tech jobs, and is quickly ushering in the ‘Feeling Economy.’”