Dow Chemical says AI is the element behind 4,500 job cuts The jury is still out when it comes to determining how much job loss AI is causing. However, we now have another case study. Dow Chemical blames AI automation for its plans to cut 4,500 jobs, about 12.5 percent of its work force. The thousands of employees losing their jobs are being cut as part of a rhyming companywide …
First we had deindustrialisation - where the majority of western heavy industry was closed down, because China could do it cheaper
Now we have so much of our knowledge-workers being displaced by AI bollocks..
What happens when a) the AI bubble goes 'pop', and b) China turns out to be not so friendly..
We're fucked, is what happens
That does not appear to be what is predicted here.
Dow appears to be predicting that by reducing plant maintenance, they will be able to reduce their maintenance workforce - skilled trades, not knowledge workers.
Plant maintenance is traditionally a very naively scheduled activity: just stuff like "at 1000 hours", and also disrupted by production changes. It's easy to see significant benefits from better pattern matching.
And also, FWIW, easy to see significant failures from LLM hallucinations. What kind of AI is "C3 AI"? C3 is/was mostly a "big data" analytics company, and it's not clear how much "AI" is in their AI offering.
Skilled trades are quite often also knowledge workers, I'd be very surprised if all the people being binned were simply spanner monkeys performing simple part swap outs.
Maintenance at 1000 hours isn't a naively scheduled activity if the $maintained-thing$ was originally designed, built and (more importantly) safety certified with that interval in mind.
No, not craters.
Just a gas leak that caused an estimated 16,000 deaths. Yes, Union Carbide is part of Dow now.
Fortunately they were Indian and thus apparently don't matter.
Skilled trades?
Do you know how much knowledge has to be stuffed into a mere 'skilled trades' in order for it to be any use?
Consider the chair you are sitting on, take a CAD model for it and turn a big hunk of high grade steel into a mould tool for the base.
So at a minimum , your skilled trades has to know howto use the CAD/CAM system , know about the various grades of steels , then howto machine them with what tool , before throwing said lump of steel onto a large machining center, then being able to set it all up. and thats before we get onto problems like drilling 6mm coolant holes 36 inches deep without them wandering off all over the place.
But then to that skilled tradesman, you sitting in front of a PC knocking out code looks easy too.....
Maintenance is not always done on a fixed timescale basis, some is, and some isn't.
For example, one of my customers uses a large gas turbine compressor which gets regular inspections every 1,000 operating hours. Maintenance decisions are then based on the condition of the equipment at inspection. Other items such as pumps often have vibration monitors which will flag up warning of e.g. impending bearing failure. For larger items such as tanks and vessels inspections are done based on risk criteria e.g. how corrosive is the process fluid. Inspections are done at a given frequency which is extended or reduced based on condition monitoring and the life of the item is thereby projected.
IMHO it's extremely short sighted to get rid of experienced maintenance techs, who are far from being 10 a penny. In addition, the type of high hazard processes operated by Dow and the dangerous chemicals used mean that lack of maintenance, or inadequate maintenance, may well result in serious accidents with injury or loss of life.
AI can't replace a skilled and experienced maintenance tech.
Most major companies use maintenance planning software e.g. SAP PM, Maximo, Fiix etc. which allow for predictive intervention.
It's still no substitute for having boots on site doing the actual work.
There is very likely a lot of "AI-washing" in these job reduction announcements.
"Our financials are getting messy so we are shrinking headcount." sounds far worse to Wall Street than "We're embracing AI and becoming more efficient!"
This announcement doesn't tell us how many jobs AI is replacing. Or if it's even directly replaced any jobs yet. It just tells us they plan to restructure and spend loads on AI to help them do it. Presumably they've actually had some success in pilot projects, rather than this just being hope-and-pray-as-a-strategy. But HaPaaS does seem to sum up quite a lot of AI announcements. Could I get away with founding an AI company and calling it that? Quick! Before the bubble bursts.
I would need some information about how many of the jobs that someone said was/will be replaced by AI were 1) actually lost rather than a "maybe this person will be replaced soon"; 2) actually had an AI program used in place of the former employee rather than the job being ended altogether or given to a different person; 3) actually done by what they're suggesting by AI, meaning a mostly automated program rather than someone realizing that they had a person doing a mechanical task and writing a normal, deterministic program to do it; 4) actually done successfully for a long time, rather than the AI plan going horribly awry and people being re-hired to go back to human work (of which there have been repeated incidents); and 5) implemented with the financial flexibility to continue to use their current approach at the increasing compute costs of LLMs. Do you have that number? The people who have parts of it seem unwilling to give me that level of detail.
I've seen plenty of things that didn't meet these requirements. Many of them were also sold as having met them. I've seen stuff that wasn't AI sold as AI. I've seen people promise they're going to replace workers any day now and then they just didn't. I've seen AI workflows that are going to save us lots of time which took longer. I've seen normal job cuts which, to make sound better to the investors, they sold as AI when it really wasn't. How much more evidence do you have, because I don't have enough yet.
"The two companies partnered last year on a predictive maintenance solution for the petrochemical industry ..."
At one point I realized I had spent half my life close enough to petrochemical plants to hear feel when they blew up. Was fortunate to have a hill between them and house so the windows didn't shatter each time.
An AI "predictive maintenance solution" scares the hell out of me. How many future new training data sets will become suddenly available before training is complete?
… firing the entire marketing department that came up with that slogan.
This is assuming there is still a marketing department, if there isn’t, either the CEO came up with the slogan, his kids or AI.
I’m hoping AI because if there’s one division of every corporate I’d like to see expunged, it’s marketing.
There’s something really special about marketing being entirely replaced by an LLM.
I reckon a really small model could do it, one that’ll run on a raspberry pi
I'd hazard a guess that it wasn't either Dow bosses, their kids, or the marketing department that came up with such a twattish title, but that it will be some parasitic management consultancy. I've been involved in similar downsizings with equally wanky names, like "Perform to Win", expensively "assisted" by a well known consultancy.
Through this work, we are leveraging best‑in‑class practices from across industries and high‑impact technologies, such as automation and AI, as we radically simplify our operating model and modernize how we serve our customers
Clearly their PR department has already been replaced by AI agents.
> transforming Dow into a company that is more resilient, consistently delivers growth, enables customer success, and delivers greater shareholder value across the cycle."
No interest in valuing, respecting and nourishing your employees who develop and produce your products and give the company100% of its income then? No, I though not.
Well, there is the slight problem that over the past three years, Dow's sales are down by a third, gross profit has more than halved, operating costs are only down by about 5% and it's looking like a net loss for this year. Share price has lost 45% in the last two years. Does that sound a good investment case to you?
Dow is still a more viable long term business than say Nvidia, or Tesla, but Dow is without the magic of AI and can't pull of the lies of the techbro. So it is all very well saying value, respect, nourish employees, but if the company is losing money then it needs to either make its divisions more efficient quickly, or sell or close them down if there's no prospect of turnaround. R&D or pleasing the workforce at this stage isn't going to help quickly enough, if at all. Even if management tried that the losses would increase in the short to medium term, and investors would sell to somebody who was willing to take the brutal actions to restore profitability.
I've worked for large businesses that haven't taken the necessarily brutal actions, and as a result they're no longer around. I've worked for those that did, and they are still around.
Layoffs companies do, usually couched in claims that they are "increasing operational efficiency" - i.e. my bonus is dependent on earnings per share so spending less will drive up EPS and I'll make a bigger bonus. And if those layoffs hurt down the road who cares I'll be retired by then.
Claiming they are due to "AI" likely boosts the stock price more than normal layoffs, as Wall Street might see Dow not as a staid old last century industrial stock but a 21st century stock on the cutting edge of the latest technology!
Yeah, I too wonder if these particular AI-layoffs are in addition to the closure of 1 UK and 2 German plants surrounding an already planned 2,300 layoffs, or if they're part of that same overall (multi-year) EBITDA-targeted restructuring? Last year they stated the measures were "due to uncertainty from U.S. President Donald Trump's shifting trade policies" (eg. World War Fee) ...
And hopefully this here switch to AI(so-called) maintenance optimization doesn't result in more plant fires as occurred last October in TX.
Maybe they should focus AI more on R&D instead, like Sandia, to improve processes and products so they use less energy to make and operate and are more easily recyclable for example.
This isn't "AI". This is an old, mature company, with mature processes and stagnating offerings, slimlining their operations - and introducing automation where possible. This is what *every* company does, especially later in life: Stop investing, stop doing "more" and instead "focus" and trim-down.
Remember, these days, if it uses a computer it's "AI". Automation is "AI". If they need money it's "AI". What's happening here happens at every company that matures.
It's start-ups that hire more people, too much work not enough man-power to get it done. It's start-ups that test out new ideas. It's start-ups that drive the economy.
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