Posted on 05/01/2023 9:08:40 PM PDT by SeekAndFind
One month ago, to much dismay and widespread denial, Goldman predicted that AI could lead to some 300 million layoffs among highly paid, non-menial workers in the US and Europe. As Goldman chief economist Jan Hatzius put it, "using data on occupational tasks in both the US and Europe, we find that roughly two-thirds of current jobs are exposed to some degree of AI automation, and that generative AI could substitute up to one-fourth of current work. Extrapolating our estimates globally suggests that generative AI could expose the equivalent of 300 million full-time jobs to automation" as up to "two thirds of occupations could be partially automated by AI."
Yet while Goldman's forecast was met with a emotions ranging from incredulity to outright mockery, it may not have been too far off the mark.
Consider that just last week, Dropbox said it would lay off 16% of the company, some 500 employees as the company sought to build out its AI division. In a memo to employees, Dropbox CEO Drew Houston said that “in an ideal world, we’d simply shift people from one team to another. And we’ve done that wherever possible. However, our next stage of growth requires a different mix of skill sets, particularly in AI and early-stage product development. We’ve been bringing in great talent in these areas over the last couple years and we’ll need even more.”
The changes we’re announcing today, while painful, are necessary for our future,” Houston notes. “I’m determined to ensure that Dropbox is at the forefront of the AI era, just as we were at the forefront of the shift to mobile and the cloud. We’ll need all hands on deck as machine intelligence gives us the tools to reimagine our existing businesses and invent new ones.”
But while Dropbox's layoffs were lateral, and meant to open up space for more AI linked hires, in the case of IBM, it is AI itself that is making workers redundant.
As Bloomberg reports, IBM CEO Arvind Krishna said the company expects to pause hiring for roles it thinks could be replaced with artificial intelligence in the coming years. As a result, hiring in back-office functions — such as human resources — will be suspended or slowed, Krishna said in an interview. These non-customer-facing roles amount to roughly 26,000 workers, Krishna said. “I could easily see 30% of that getting replaced by AI and automation over a five-year period.” That would mean roughly 7,800 jobs lost.
Part of any reduction would include not replacing roles vacated by attrition, an IBM spokesperson said.
Krishna’s plan marks one of the largest workforce strategies announced in response to the rapidly advancing technology; it certainly won't be the last as virtually all companies follow in IBM's footsteps and layoffs tens if not hundreds of millions of workers in the coming years.
Mundane tasks such as providing employment verification letters or moving employees between departments will likely be fully automated, Krishna said. And while some HR functions, such as evaluating workforce composition and productivity, probably won’t be replaced over the next decade, it is only a matter of time before these roles are also replaced by AI.
IBM currently employs about 260,000 workers and continues to hire for software development and customer-facing roles. Finding talent is easier today than a year ago, Krishna said. The company announced job cuts earlier this year, which may amount to about 5,000 workers once completed. Still, Krishna said IBM has added to its workforce overall, bringing on about 7,000 people in the first quarter.
The Armonk, New York-based IBM beat profit estimates in its most recent quarter due to expense management, including the earlier-announced job cuts. In the past IBM had managed to manipulate its stock higher thanks to billions in stock buybacks (at much higher prices). But once its debt load grew too big, the buyback game ended, Warren Buffett sold his shares, and the stock price has languished for over half a decade. And since the company's revenue is stagnant at best, its only hope is to drastically cut overhead.
Enter AI: new "productivity and efficiency" steps - read replacing workers with algos - are expected to drive $2 billion a year in savings by the end of 2024, Chief Financial Officer James Kavanaugh said on the day of earnings.
Helping the company's imminent transition to an AI-staffed corporation will be the coming recession. Until late 2022, Krishna said he believed the US could avoid a recession. Now, he sees the potential for a “shallow and short” recession toward the end of this year, although it remains unclear just how once can determine that a recession will be "shallow and short".
Seems to me that 100% of congressional staff could be replaced by AI as well as 95% of federal agency staff. We’d need to keep humans in some jobs, like running the DMV where efficient service would be too great a shock.
Whew...there are no mechanical engineers listed to be replaced by AI. What a relief!
When I was a child there weren’t 50 people in the country employed working with personal or business computers. When computers stated making inroads in the 60’s 70’s and 80’s the concern was about people losing their jobs to computers... What happened was computers created jobs. AI could be the same.
RE: Whew...there are no mechanical engineers listed to be replaced by AI. What a relief!
They’re probably part of the list in the category — ARCHITECTURE AND ENGINEERING ( see the chart on this article ).
That would be an improvement...
Pretty simple.
People are a pain in the ass.
It is cheaper to replace them
when you can do so.
I think $15 per hour was the tip point.
I am not worried. Microsoft is touted as leader in AI. If Microsoft needed 950 updates for Windows operating system, AI will be so buggy it will not be funny.
At some point, maybe within 7 years, serious thought will be given to setting a certain number of jobs aside that can only be filled by human beings. We are at this point already.
What appears to be a marvelous and modern improvement is going to put scores of highly trained people out of work.
Where are all these people going to go? What will they do with what remains of their most productive years?
Some may commit crimes of violence, due to the bitterness and frustration of having their routines destroyed all of a sudden. Watch and see. This will be a problem for the next president to deal with.
Computers did not create the same number of jobs they displaced. At best, maybe 1/3 of new jobs were created. I’m betting that the number of new jobs might be 1/10 of the jobs being destroyed. More over time.
Well, on the positive side, can those laid off and fired folks start with the Indians? Maybe now we can get rid of them.
Only if you can get AI to vote..... 🤣🤣🤣🤣
You must be easy to replace if some low caliber H1B visa worker replaced you. I never had that problem in 37 years in US manufacturing jobs.
“congressional staff”
Let’s start with congress critters.
That is truly amazing considering there are currently only about 158 million people employed in the U.S.
Apparently AI is so amazing it's going to replace 142 million workers that don't even exist.
They created numerous times the number of jobs that they replaced.
It is not close. 75% more jobs than 50yrs ago and computer jobs went fr near zero to a lot.
I understand the confusion though, the doomsday models and doomsdayers have such a rich history of accuracy year in and year out. Just see peak oil, peak food, ozone hole, covid-
AI is going to take everyone’s job!
(incl the pesky HR depts patrolling social media)
Excellent point. Artificially intelligent chatbot describes most Indians.
“What happened was computers created jobs. AI could be the same.”
The difference is that AI systems can design themselves. They already are. Any jobs created will likely be menial one (e.g. sales of AI systems).
This article was probably written by an AI bot.
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