No it doesn't. It means more demand. Read up on Jevon's Paradox. As a resource (including labor) is used more efficiently, demand for it goes up, not down, because of greater opportunities. It would only go down if the Lump of Labor Fallacy wasn't a fallacy.
The problem is, people aren't coal. A coal seam can sit unused for a hundred million year with no ill effects. An unemployed laborer can't. He either gets a job fast or falls into poverty. Supply of labour cannot go down in response to market situation; the only thing that can go down is the price. And as price of labour falls, demand for products falls, because people who get paid less can't afford as much. As demand for products falls, more people get unemployed, and you have a nice little vicious circle going.
It's what's happening now. Cheap credit kept a fundamentally broken system going for a while, but now that well has ran dry and it's collapsing. Keeping it going forever would require citizen pay, or credit without expectation of repayment. But I doubt the rich and powerful will accept the economic independence this would bring to lower classes, but will continue fighting tooth and nail to retain their power all the way to another bloody revolution.
As a side note, economy is full of "fallacies" that only apply with certain preconditions, for example that the resource can go unused with no ill effects. Ignoring those preconditions makes them a fine way to explain away any need to change. The problem is, reality won't go away just because you ignore it, and reality is that lots of people are unemployed, those still employed are living under constant pressure and fear, national and personal debts are sky-high, and nobody seriously expects any of this to get better in the foreseeable future, at least outside official speeches.