OM in the News: AI is Coming to Tear Down Cubicle Jobs

All around this desert city’s sprawling metro area, low-rise office parks with tinted windows and vast parking lots stretch to the horizon. This is America’s back office, writes The Wall Street Journal (May 26, 2026).

Abundant land and cheap labor made Phoenix the place for companies to place lower-paid office workers who don’t need to be physically close to clients or headquarters. The cubicle-based jobs—customer service, data entry, payroll processing—created a vital ladder to the middle class, helping replace factory work lost to overseas competition.

Furniture for sale at an office liquidators. Offshoring and AI have affected remote-friendly, white-collar roles

Now, these white-collar jobs are fading, too, thanks increasingly to AI. Tens of thousands of local workers suddenly face an uncertain future. Job-placement firms that supply companies with back-office workers are seeing less demand and are cutting their own staff, too.

Many workers lost their jobs last year as their Phoenix employer, Lumen Technologies, relied more on AI to engage with customers and landline use continued to drop.

Around 16.5 million Americans still work in office support jobs like customer-service reps, office clerks and data-entry clerks. That’s more than the number working in manufacturing, but also down from around 18 million 6 years ago. The number of customer-service representatives in Phoenix alone has tumbled 26% in the past 4-years.

Losses are expected to mount as AI takes over the kind of basic, repetitive tasks that are often back-office hallmarks. The government projects jobs in this sector will fall the steepest among all major employment categories.

That has major ramifications for the American working class. Fifty years ago, factory jobs offered a path to the middle class for millions of Americans who didn’t have college degrees. As those jobs disappeared, lower-skill cubicle gigs helped fill the void. Call-center gigs got people into corporate offices and taught valuable soft skills like solving problems and talking to strangers. That helped workers climb the ladder to higher-paying careers like sales.

The race to retrain the workforce is already on. Local universities and community colleges have started offering training programs in AI and chip making. Advanced manufacturing is now the priority.

Classroom discussion questions:

  1. Where will these workers find new jobs?
  2. What are the benefits of AI in this sector?

OM Podcast #50: AI, the Workforce, and National Security

In our latest podcast, Barry and Misty interview Kyle Stephens, Senior Director at General Dynamics IT (GDIT). Kyle brings a unique perspective shaped by experience across retail operations, defense contracting, enterprise technology, and government service.

In this conversation, we explore how artificial intelligence is already reshaping work inside mission‑critical and national security environments. Kyle explains how he uses AI in his own role to accelerate analysis, compress large volumes of information, and improve decision quality. The discussion also addresses workforce implications, including how organizations should think about upskilling employees as AI adoption increases.

Dr. Kyle Stephens
Prof. Misty Blessley
Prof. Barry Render

 

 

 

 

Finally, the podcast turns to AI and security. Kyle explains why AI security in defense settings extends well beyond cybersecurity, and how AI is being deployed by the U.S. as well as adversaries.

 

TRANSCRIPT
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OM in the News: Delta’s Pilot Scheduling Headaches

Delta Air Lines prides itself on not canceling flights. Lately, that hasn’t been going so well, reports The Wall Street Journal (May 27, 2026). Its domestic-flight cancellation rate has been higher than the industry average this year, a setback for the airline.

The first weekend in May, Delta canceled hundreds of flights after minor weather disruptions, while other airlines ran relatively smoothly. Only the now-defunct Spirit Airlines scrubbed more. Delta’s cancellations related to pilot availability are more than 10 times historical levels and account for 35% of mainline flight cancellations, up from 7% in 2024.

One issue is that Delta is looking for pilots close to flight departures more often. The often-byzantine process Delta uses to staff those flights hasn’t been functioning well.

For some types of planes, it can take Delta 12 hours to find pilots to work a single trip. Pilots are accepting extra trips less often, with an acceptance rate of 2%, down from 37% a year earlier.  Delta’s pilots said they are working more overtime than ever and that the problem is that the airline is chronically short on pilots.

Delta hired 500 pilots in 2025, less than half of what it hired the previous year and hundreds less than the number hired by American and United.

Delta says it is adequately staffed, with 20% more pilots than in 2019. It has accelerated pilot hiring, and boosted crew-tracker and scheduler staffing over 15% since last summer.

Trimming the number of flights Delta is planning to fly, in response to high fuel prices, could help provide more buffer and leave more time for maintenance. Operations leaders are trying to get ahead of looming problems and make quicker decisions about when to cancel flights, before disruptions cascade.

Some fixes to Delta’s pilot-scheduling process are at the center of negotiations between the airline and the pilots union—often a slow-moving process. And it takes time to get newly hired pilots through training and in their seats.

Classroom discussion questions:

  1. Watch the short video on scheduling at Alaska Airlines that is found in your text’s Module B. What techniques do most airlines use to schedule pilots and crew?
  2. Why is Delta facing this problem?

Guest Post: Looking Beyond Fuel–The Strait of Hormuz’s Connection to the Food Supply Chain

Temple U. Professor Misty Blessley raises a timely issue with her monthly Guest Post.

The Strait of Hormuz closure highlights a risk far greater than rising gasoline prices. The world is facing a potential fertilizer shock that could ripple through the global food supply chain. While headlines often focus on oil, the Strait is also a critical corridor for nitrogen-based fertilizers, especially urea, which depends heavily on natural gas as a feedstock.

Roughly 1/3 of global seaborne fertilizer normally moves through this chokepoint. With passage through the Strait at a standstill, the concern is whether farmers will have access to adequate and affordable fertilizer during this planting season.

Fertilizer and fuel are deeply intertwined. Nitrogen fertilizer is produced by converting natural gas into ammonia. Any disruption in gas supply immediately constrains fertilizer production. Thus, when the Strait is shut down, fertilizer producers will follow in turn. It is reported that nitrogen fertilizer supports approximately half of the global population.

Scotts MiracleGro struggled to keep store shelves stocked during the COVID era demand surge, underscoring how long it can take for a disrupted supply chain to regain equilibrium. This is where the risk becomes acute. Corn, wheat, and rice, major food sources the world over, are among the most nitrogen-hungry crops. Countries that rely heavily on imported fertilizer,
such as India, Brazil, China and the U.S., are especially vulnerable with vast amounts of fertilizer originating in the Middle East. A prolonged disruption could mean lower crop yields, eventually leaving empty space on grocery shelves.

The Strait’s closure is rippling into a food security crisis in slow motion.

Classroom Discussion Questions:
1. Effective risk management requires visibility into every material, its origin, and each step of the production process along the supply chain. How can AI be leveraged to help map these dependencies, identify vulnerabilities, and strengthen risk mitigation strategies? (Refer to Chapter 11 of the Heizer/Render/Munson textbook Figure 11.1 as a multi-tier supply chain example).
2. It is widely estimated that as much as 40% of all food produced is lost or wasted somewhere along the supply chain. Identify organizations working to reduce food waste and discuss what would be required to scale their solutions effectively.
3. In your opinion, is reducing food waste a viable mitigation strategy?

 

OM in the News: Using AI to Inspect Fruit at Albertsons Supermarkets

Albertsons Companies just announced the launch of Intelligent Quality Control, an artificial intelligence-powered tool designed to improve the assessment process and consistency of fresh produce in stores, reports Fresh Portal (May 20, 2026).

The solution, developed by the company in collaboration with Google Cloud, uses computer vision and the  Gemini platform to support quality inspectors in distribution centers.

The system can analyze uploaded images of fresh produce and automatically assess visual characteristics against the retailer’s internal quality standards. The system then provides a rating of the product as well as recommendations to support decision-making.

Albertsons developed this tool to support its quality inspectors and increase consistency in evaluations, which is fundamental for fresh products.

The technology is currently in use to inspect strawberries and red and green grapes. The next step will be to expand the solution to the rest of the berry category and subsequently to more fresh products throughout the U.S.

Among the benefits observed, Albertsons emphasized greater uniformity in assessments across inspectors and shifts, a faster inspection process, and enhanced data collection for continuous analysis and improvement.

The new tool is part of Albertsons’ digital transformation strategy, which in recent years has incorporated AI and data science into both internal operations and consumer-facing platforms.

Classroom discussion questions:

  1. How else could vision systems and AI be used in the grocery industry?
  2. What are the advantages to Albertson in using AI?

OM in the News: Apple’s Global Strategy– Why the MacBook Neo Rules Out a “Made in USA” Label

In operations management, achieving a competitive advantage relies heavily on a well-executed Operations Strategy. a topic we stress in Chapter 2. When Apple introduced its new $599 MacBook Neo to challenge Google’s dominance in the low-priced laptop market, many asked a familiar question: Why not assemble it in the U.S.?

While the U.S. has recently expanded high-tech chip production through the CHIPS Act, high-volume electronic assembly requires a completely different operational footprint. Apple’s decision to stick with manufacturing hubs in China and Vietnam highlights how leveraging global operational strengths secures a low-cost and response-driven competitive advantage, reports Forbes (may 10, 2026).

1. Cost Leadership Through Labor  To compete effectively with the Chromebook, Apple must maintain strict cost leadership. Labor costs remain a significant differentiator in product assembly:

U.S.: $39.32/ hour , China: $6/hour , Vietnam: $2/hour

Placing assembly lines in the U.S. would completely erase the slim margins required to sustain a $599 consumer laptop.

2. Rapid Response and Engineering Flexibility Competitive advantage isn’t just about cost; it’s also about speed and flexibility. Overseas manufacturers like Foxconn and Quanta employ thousands of specialized production engineers. These engineers can rapidly redesign and reconfigure high-volume assembly lines on short notice to accommodate sudden production spikes—such as Apple’s recent plan to double Neo production from 5 million to 10 million units. Finding this scale of specialized technical talent quickly in the U.S. remains an steep uphill battle.

3. The Power of a Localized Supply Chain This is perhaps the ultimate barrier to entry for domestic assembly. In Asia, component suppliers, repair services, and maintenance facilities are clustered tightly around major assembly plants. When Apple previously tried to build the high-end Mac Pro in Texas, production stalled simply because they struggled to source custom screws from local machine shops. In contrast, overseas supply chains can manufacture vast quantities of custom components virtually on demand.

Classroom Discussion Questions:

  1. How does the concept of “comparative advantage” affect a company’s decisions regarding geographic supply chain design?

  2. Can automation and AI ever fully offset the labor rate differentials between Western and Asian manufacturing hubs?

OM in the News: AI Agents, Project Management, and Work Team “Pods”

Companies are restructuring project management teams into smaller, more nimble cross-functional ‘pods,’ made up of humans and AI agents, writes The Wall Street Journal (May 18, 2026).

Pods are the next step in an ongoing project management organization evolution. In recent decades, so-called scrum teams—cross-functional groups focused on deploying and iterating quickly—have replaced a slower, step-by-step project management  methodology known as “waterfall,” which is noted in Chapter 3 of your Heizer/Render/Munson text.

Smaller than a traditional project management group, pods are designed to move faster to build. They are also more cross-functional, including engineers, designers and applied scientists. And critically, all that expertise is concentrated in just a handful of human workers (anywhere from 1 to 8), as well as AI agents.

For years project managers have been slowly favoring smaller and smaller teams in the name of speed and agility, but the growing capabilities of AI coding assistants and other agents that can potentially reduce time are allowing for even smaller pod-size structures. With AI agents doing more of the actual software development, including coding and testing, it takes fewer human workers to complete projects.

The benefit of pods is speed, agility and the ability to do more, faster, with fewer resources, said a Coinbase tech leader. That company now has a team of 3 people working on an AI adviser project, he said, adding that: “historically an undertaking like that would have required 10 to 15 people. There are these exponential gains when we have fewer people because you’re spending a lot less time in meetings and reviews and getting people on the same page.”

In the early days of Amazon, Jeff Bezos famously advocated for the idea of the “two-pizza team”—that is, any team should be small enough that it could be fed with two pizzas. “If you have a large team, you spend half your time just talking to each other and trying to figure out what needs to be done,” said Amazon’s VP.

Classroom discussion questions:

  1. How is AI influencing the management of large projects?
  2. What is an AI agent?

OM in the News: AI-Based Robots

Should companies deploy robots at their plant if they could virtually reprogram themselves to perform new and different tasks, asks Industry Week (May 13, 2026)? We’re nearly at the end of the AI hype cycle, when suggestions for how to leverage the technology become less flashy and more realistic.

Now Siemens has just revealed Eigen, an AI agent that can replace manual coding or programming for programmable logic controllers, distributed control systems, and robotics applications, updating code or instructions to reflect new priorities and goals.

Siemens says that engineering and reconfigurations constitute 70% of the entire lifecycle cost of a robot. If, however, an AI agent like Eigen can shorten the time needed to make these adjustments, it makes the robot more efficient, and small and medium-sized businesses might be better able to afford deploying the technology.

“There’s a kind of new age of automation arising, because with AI assistance to program robots and PLCs, it means you could suddenly automate much smaller lot sizes on a good return of investment,” says the firm’s CEO of its automation division.

Eigen can help manufacturers deal with a lack of coders and programmers. Another Siemens exec adds “We don’t attract the best of the programmers to the manufacturing floor. … So getting programmers to come and code our controllers or robotic systems? That was a scale up bottleneck. Bringing in AI to reprogram things, reprogram the whole process, will be more game changing in the U.S. than in Germany, where I see when people with Master’s degrees on the manufacturing floor, which is not the case in the U.S. Humans must always remain in the loop, however. Agentic AI is like an orchestra and humans the conductors.”

In short, Eigen acts as an AI-agent that handles the tedious, expensive back-end coding of robotics, making automation flexible, cheaper and more accessible to smaller firms.

Classroom discussion questions:

  1. What is Eigen‘s role?
  2. What is the roadblock to more robotic use in small manufacturers?

OM in the News: Drones Gain Manufacturing Altitude

Drones, in the headlines every day from Russia, Iran and Hezbollah, are also real manufacturing tools that can add valuable context and support. “They provide clear value in activities that are traditionally labor-intensive, disruptive or difficult to perform safely,” writes Industry Week (May 7, 2026).

Drones are making inroads in manufacturing in these two areas:

Inventory tracking:  Indoor drones equipped with barcode scanners and computer vision systems can perform inventory scans with minimal disruption. In large warehouses or storage areas, they can significantly reduce cycle-count time and increase count frequency. The real-time data can be integrated into corporate software platforms, reducing excess stock and decreasing production delays due to stockouts.

Inspection: Conventional industrial inspections often require scaffolding, rope access, shutdowns or travel. They expose workers to heights, to confined spaces or to environmental hazards. Drones can transform this activity. High-resolution visual, thermal, ultrasonic and lidar payloads allow inspection of hard-to-reach areas, including storage tanks and silos, pipe racks, roof structures and overhead utilities. For remote manufacturing facilities, a drone mission can eliminate days of logistics and increase safety performance.

The business impact is measurable: reduced downtime, lower mobilization costs, reduced safety risk and faster response to problem detection. In the energy and utilities sector, drone-based inspection has been estimated to reduce inspection costs by 70% and downtime by 90%.

Future innovation: The next stage in drone deployment is autonomous operation. Drones will increasingly operate from fixed docking stations, launching automatically to perform scheduled inspection missions. Data collected during these flights can be transmitted to AI-enabled analytics platforms and integrated into operational systems in near real-time. Coordinated drone swarms may be used to conduct large-scale inspections and surveys across a large infrastructure.

Challenges: Concerns about workforce displacement are common, and the increased adoption of drones is no exception. But drone programs typically augment skilled labor rather than replace it. Technicians can become certified drone pilots, remote inspection specialists, data analysts or AI-assisted defect reviewers.

Modern industrial drones are connected devices and must be treated as operational technology nodes within the broader cybersecurity architecture. A compromised drone platform presents a risk that goes beyond simple device failure. It may expose critical infrastructure data or provide a means to compromise enterprise networks.

Still, a fully scaled drone program that makes good use of its data is a significant strategic asset.

Classroom discussion questions:

  1. What other industries are already commonly using drones?
  2. Discuss their use in modern warfare.

Guest Post: Amazon’s Next Act–Supply Chain as a Service

Dr. Jon Jackson is Associate Professor of Operations Management at the Providence College School of Business. He has created a series of AI exercises for each chapter in our text.

The term “software as a service” (SaaS) has become ubiquitous over the last few decades, covering everything from CRM systems (e.g., Salesforce) to file storage (e.g., Dropbox) and e-commerce platforms (e.g., Shopify). Amazon entered this arena in 2006 with Amazon Web Services (AWS), offering “infrastructure as a service.”

Fast forward to 2026, and Amazon is applying a similar playbook to logistics with its new “supply chain as a service” platform, Amazon Supply Chain Services (ASCS), according to an Amazon press release (May 4, 2026).

ASCS opens Amazon’s vast global logistics network not just to its own marketplace sellers, but to businesses operating across competing marketplaces and in B2B channels. As Peter Larsen, vice president of Amazon Supply Chain Services, puts it, the platform is “available to any business of any shape or size.”

This marks a significant shift. For years, companies have relied on third-party logistics providers (3PLs), with an estimated 94% of Fortune 500 companies using at least one. Now, Amazon is positioning itself as a full-stack alternative, offering freight, warehousing, fulfillment, and last-mile delivery in a single integrated system. In 2025, Amazon’s logistics revenue was estimated at $172 billion, far surpassing competitors like DSV ($37 billion) and DHL Supply Chain ($35 billion), reported by The Wall Street Journal (May 4, 2026).

Early adopters of ASCS include major brands such as Procter & Gamble, 3M, Lands’ End, and American Eagle Outfitters.

If AWS transformed how companies build and scale software, ASCS could do the same for physical commerce by reshaping supply chains and the competitive dynamics of global logistics.

Classroom Discussion Questions

1.How does ASCS impact traditional 3PLs (e.g., FedEx, UPS, DHL)? What can they do to differentiate and defend their market share?

2. As a business owner, what concerns would you have about outsourcing your entire logistics operation to Amazon?

3. Could Amazon’s “supply chain as a service” model become as dominant as AWS? What would that mean for competition in retail and logistics?

 

OM Podcast #49: An Interview with the CEO of the Florida Semiconductor Engine About Reshoring

In this episode of the Heizer Render Munson OM Podcast, Barry Render talks with Dr. Ron Piccolo, CEO of the Florida Semiconductor Engine, about why semiconductors have become such a critical issue for the U.S. economy. From phones and cars to medical devices and defense systems, semiconductors power everyday life—but much of the manufacturing and packaging happens overseas, creating supply‑chain and security risks.

A key focus of the conversation is advanced packaging, which refers to newer ways of assembling semiconductor chips to improve performance, reduce heat, and increase reliability. Piccolo explains that while high‑volume manufacturing will likely remain global, the U.S. has a strong opportunity to bring specialized, high‑reliability packaging back home—especially for industries like space, healthcare, and defense.
The episode also explores how universities, government, and industry can work together to build regional innovation ecosystems. Supported by a National Science Foundation grant, the Florida Semiconductor Engine aims to create a one‑stop shop for design, prototyping, and testing—strengthening U.S. competitiveness while supporting high‑skill jobs and regional growth.

 

TRANSCRIPT LINK
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Prof. Barry Render
Prof. Ron Piccolo

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OM in the News: Rise in Cargo Theft as Criminal Tactics Evolve

There is a deepening and increasingly complex global cargo theft crisis, driven by organized criminal networks deploying ever more sophisticated tactics across road, rail, sea, and digital channels, according to Material Handling & Logistics (April 28, 2026).

Food and beverage products led all stolen commodity categories, followed by agriculture, electronics, automotive parts, construction materials, and metals.

Trucks remain the dominant target, accounting for 70% of all incidents globally, and more than a fifth of global cargo theft incidents involved the cooperation of insiders.  Brazil, Mexico, India, the U.S., Indonesia, Chile, China, Germany, and South Africa ranked as the world’s top countries for recorded cargo theft incidents.

Rail cargo theft in the U.S. rose to 10% in 2025. Organized criminal groups – including cartels operating out of Sinaloa, Mexico – carried out coordinated attacks on freight trains across rural areas of Arizona and California, employing deliberate system sabotage, detailed advance planning, and armed encounters with law enforcement.

Technology-enabled theft also grew more sophisticated, with criminals exploiting cybersecurity weaknesses, fraudulent documents, and impersonation tactics to carry out fictitious pickups, double and triple brokering, and product hostage schemes.

In Europe, Germany, Italy, the U.K., France, and Spain reported the greatest number of thefts. Facility thefts rose notably – particularly in Italy, Germany, Romania, and Bulgaria. In the U.K., cargo theft losses reached $149 million in 2024. A $9 million smartphone heist at Heathrow airport ranked among the highest-value incidents.

In Asia, India, Indonesia, China, Bangladesh, and Vietnam were the region’s most affected countries. Half of all incidents occurred at warehouses and production sites. A notable emerging trend was the theft of rare earth minerals in China. Maritime risks also escalated sharply, with sea piracy incidents rising 85% in the first half of 2025 – reaching their highest levels in nearly a decade.

Criminal groups are targeting every link in the chain – from unsecured parking spaces and rest stops to exploitable digital freight platforms.

Enhanced GPS tracking and tamper-evident sealing, tighter governance around load board usage, increased investment in scanning technology and cross-agency intelligence sharing, as well as heightened scrutiny of subcontracted transport providers, are all needed.

Classroom discussion questions:

  1. What can operations managers do to quell this threat?
  2. What is the main source of the thefts documented?

OM in the News: The U.S.’s Greatest Breakthroughs

As we discuss in Chapter 5, Design of Goods and Services, new products are the lifeblood of every company–and every country. According to The Wall Street Journal (April 24, 2026), here are the top 10 inventions coming from the U.S. that had the greatest impact on society. 

1. The Internet— Erasing the constraints of geography, it became the central nervous system of the global economy. It enabled trillion-dollar industries, upended retail and media, and democratized access to information on a scale unseen since the Gutenberg press. It is now the indispensable infrastructure of the 21st century, facilitating nearly every economic and social interaction, and transmits more data in a second than it did in an entire month in the 1990s.

2. Lightbulb— Edison’s 1879 invention fundamentally restructured the human relationship with time and severed dependency on the sun, transforming the U.S. night from a period of dormant isolation into a commercial and social frontier, paving the way for the 24-hour city.

3. Integrated Circuit–By the late 1950s, the future of computing was stymied by size.  The breakthrough arrived in 1958 when Texas Instruments built the first integrated circuit. Modern chips can contain more than 50 billion transistors; early integrated circuits contained just a handful of components.

4. Personal Computer–Before the mid-1970s, computers were hulking mainframes housed in climate-controlled rooms, accessible mainly to governments and large corporations. The desktop revolution accelerated the Information Age by placing analytical power in individuals’ hands.

5. Airplane–Human flight went from myth to reality on a cold morning in 1903. Aviation fundamentally compressed space and time, turning grueling ocean and train voyages into routine flights.

6. AC/DC Power–Unlike direct current (DC), alternating current (AC) could travel vast distances before being safely lowered for household use, and served as a catalyst for global industrialization. By decoupling power generation from power consumption, AC meant that massive factories no longer had to be anchored to rushing rivers or local coal plants.

7. Telephone–For society, the telephone collapsed a massive continent into a single, interconnected neighborhood. Demand for switchboard operators brought hundreds of thousands of women into corporate offices, reshaping the clerical workforce.

8. Smartphone–The introduction of the smartphone–crystallized by the 2007 debut of the iPhone–collapsed multiple devices into a single pocket-sized tool. By combining an intuitive multitouch interface with always-on internet connectivity, the smartphone became a universal remote control for modern life.  U.S. users average more than 5 hours a day on their smartphones.

9. Refrigeration–Mastering refrigerated transport and storage decoupled society from its local geography, allowing the cattle ranges of the American West to feed the East Coast via insulated, ice-cooled railcars. Less than 1 in 5 American households had a mechanical refrigerator in 1930; by 1950,  4 in 5 did.

Workers unloading a reactor vessel for the world’s first full-scale civilian nuclear plant in Shippingport, Pa.

10. Nuclear Power— After the first atomic power station in 1957, commercial nuclear power is again being re-examined, driven in part by the energy demands of AI and the push for climate-neutral power. A uranium-fuel pellet the size of a fingertip packs as much energy as roughly one ton of coal or 149 gallons of oil.

 

Classroom discussion questions:

  1. What is your ranking of these top 10?
  2. What should be the next 15 inventions in the list?

OM in the News: The AI Splurge and Big Tech’s Workforce

Tech companies are rushing to trade their people for more chips. “Some of those companies might come to regret the exchange,” writes The Wall Street Journal (April 27, 2026).

Microsoft (by 7%), Block (parent of Square and Cash App by 40%) and Meta (by 8,000) are just the latest major tech companies trying to scale back their workforces in the name of AI. Layoffs affecting 45,800 tech employees were just announced, making March 2026 the worst month for reported tech-job reductions in at least 2 years.

Companies are straining to portray the cuts as evidence that they are confident in an AI future in which more workers will be replaced by machines.  Tech companies are shelling out as much as they can—more than their rivals, they hope—on AI chips and data centers that could put them in the lead in a race they feel they can’t afford to lose. That in turn is heightening competition over who can use AI to help do more with a lot less, freeing up money to spend on expensive chips.

Dressing up layoffs as visionary moves for the age of AI carries certain risks. Rampant layoffs hurt morale and create an exit incentive for other employees, especially talented ones with alternatives. For all of AI’s capabilities, people will be needed to figure out business models, deal with customers and, importantly, make sure AI tools are being deployed and used safely.

The layoffs also lend credence to a growing public perception that AI isn’t a panacea but a job killer. That will feed a backlash that is already constraining AI, as more communities are fighting against the construction of massive data centers.

The reduction in workforces sends two messages. First, it indicates tech companies will stop at nothing to spend on AI, something markets have often cheered. Second, it says tech companies believe they can operate fine with fewer employees, even after a couple of years of cuts that followed a Covid-era hiring spree.

Classroom discussion questions:

  1. What are the tradeoffs in reducing tech headcounts?
  2. What are the implications for our students and recent grads?

 

 

OM in the News: Making Renewable Natural Gas Directly from Waste

A new method for treating sewage sludge from a wastewater treatment plant efficiently created renewable natural gas while reducing the cost of the treatment. The work could help communities sustainably clean up waste while getting renewable natural gas for their energy needs.

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When workers at Washington State U. pretreated sludge collected from a nearby wastewater facility, they produced 200% more renewable natural gas compared to current practices and reduced the final disposal cost by nearly 50%. Renewable natural gas could be used in the same way as fossil-fuel based natural gas for a wide variety of uses, including for electricity generation, home heating, or for transportation without the same climate effect as fossil fuels.

“This technology basically converts up to 80% of the sewage sludge into something valuable,” said Prof. Ahring in WSU Insider (April 21, 2016). The WSU team added a pretreatment step, treating the sludge at high temperature and pressure with oxygen added before the anaerobic digestion process. The small amount of oxygen under high-pressure conditions acts as a catalyst to break down the long polymer chains in the material. The team showed that their pretreatment resulted in reduced cost to treat the sewage from $494 to $253 per ton of dry solids.

“This approach not only enhances carbon conversion efficiency and methane yield but also enables direct production of pipeline-quality renewable natural gas with minimal CO2 content — addressing two major limitations of existing sludge-to-energy systems into a single, scalable methodology,” said Ahring.

Wastewater treatment facilities use large amounts of electricity to clean up municipal wastewater, making up between 3% and 4% of the total electricity demand in the U.S. They are often the largest user of electricity in a small community. Their treatment processes also contribute to global warming, adding about 21 million metric tons of greenhouse gases to the atmosphere annually.

About half of the 15,000 wastewater treatment plants in the U.S. use anaerobic digestion to reduce sewage waste and make biogas, but the process, in which microbes break down the waste, is inefficient and struggles to break down all the complex molecules in the sludge.

Classroom discussion questions:

  1. Why is wastewater such an important issue?
  2. Referring to Supplement 5 in your Heizer/Render/Munson text, how does this support the triple bottom line?