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".
I still suffer with Lotus Notes.......
IBM stands for International Business machine. I had an uncle who worked for IBM in Poughkeepsie back when they were in the old campus and he helped invent a numerical cylinder for mechanical adding machines. When IBM shifted to computers and the resulting media storage devices, lots of those old IBMer’s reached that point of obsolescence and were let go. Field cost center more Factory was shuttered in the gates were locked, and Poughkeepsie fell into a general downturn which still might be persistent.
It was that Uncle who mentored me with the advice that I should pick a trade that won’t reach obsolescence and he suggested electrical work or electronics, of those two electronics suffered as technological advances ensued at a rapid pace shoving many old school electronic technicians to the wayside, luckily I chose electrical work and was able to forge a career out of a technology that will be around indefinitely.
So obsolescence has shifted before and it looks like it continues to transpire and people lose their jobs because of obsolescence and the younger workforce trained on emerging technologies follows on.
It’s the nature of technologically advanced trades. There remains a bit of legacy work afterwards or perhaps management of the emerging technical workforce but those positions are limited.
You must not work in IT, nor have any American friends working in IT. Otherwise, you would have a very different opinion.
“Seems to me that 100% of congressional staff could be replaced by AI as well as 95% of federal agency staff.”
I disagree. The rats would love the idea of congressional staffing and federal employees being replaced by AI. The democrats would see to it that the AI’s ability to think would be leftist based.
I think AI is currently overrated. Granted, I know little about it, but it still must have to be programmed how to think and solve problems.
There is a somewhat universal belief that a computer cannot make a mistake. I think that’s one reason why “computer modeling” of things like glow bull warming is so believable to many. The fact is, “garbage in, garbage out”, which means a computer will only do what it is programmed to do. If the programming and input data of a computer model leans towards a warmer climate, then the computer output will show just that.
If AI is programmed to be a communist thinker, it will do just that.
I could be wrong, but seriously doubt it.
Maybe humans will get replaced from multiple jobs over time. Are we up to Frank Herbert's Butlerian Jihad yet?
What is the AI version of
“THINK”
just aksin’
The fact is that there are lots of workers doing “bullshit jobs”.
“Graeber describes five types of meaningless jobs, in which workers pretend their role is not as pointless or harmful as they know it to be: flunkies, goons, duct tapers, box tickers, and taskmasters.”
https://en.wikipedia.org/wiki/Bullshit_Jobs
It is normally difficult to eliminate bullshit jobs because no middle manager wants to see their little empire shrink, no union rep wants to see their membership shrink, etc.
AI, just like other technological changes in the past, will give management the ability to rearrange business processes and organizational structures. In doing so, they can reduce the number of bullshit jobs and eliminate a lot of dead wood.
It doesn’t matter what you think.
It matters what the boss thinks.
You could be God’s gift to your employer, but if your employer thinks somebody only marginally good but way cheaper and easier to manage is a better choice, prepare to be ousted by the H1b.
And you’ll likely only find out the hard way.
Oh, my goodness! Soon, there will only be jobs for illegals, cuz I hear everybody hires them for manual labor.
You failed our audit and you're a conservative. Goodbye.
These are the guys who let a good salesman named Ross Perot go.
“I think there is a world market for maybe five computers.”
Thomas Watson, president of IBM, 1943
IBM CEO gets replaced by HAL
I always assumed industrial automation was 20 years ahead of white collar automation.
After reading and watching some of the things that white collar AI can do, I am now thinking the exact opposite may be true.
White collar AI could be an absolute miracle for small business owners and entrepreneurs.
Imagine scanning the 100 best business and engineering books in the world into your Office AI system.
An endless stream of expert analysis and opinion!
entropy12 is himself an immigrant from India.
Or, at least, has publicly claimed on this forum to be one.
That fact might color his comments somewhat.
David Rolfe Graeber (/ˈɡreɪbər/; February 12, 1961 – September 2, 2020) was an American anthropologist and anarchist activist. His influential work in economic anthropology, particularly his books Debt: The First 5,000 Years (2011), Bullshit Jobs (2018), and The Dawn of Everything (2021), and his leading role in the Occupy movement, earned him recognition as one of the foremost anthropologists and left-wing thinkers of his time.[1][2][3]
Huh ...
Arrived at age 20 in US to work on masters degree in mechanical engineering. After graduation I was hired by American outfit and they insist I stay in US permanently. My plan was to return to India where a job was waiting for me at Hindustan Aircraft in Bangalore. Still here at age 83. Plan is to make it to 100 without aches and pains.
Https://YouTube.com/shorts/cOZbElfBdCU?
My work at a heavy machinery manufacturer made it impossible to lay me off. My expertise in design of machines subjected to highest impact loads in the world (cold extrusion if steel) plus my expertise in using numerically controlled machines plus my ability to develop expert software for design and manufacturing, was enough for life time secure job. I retired at age 57 due to becoming financially independent. Spent next 15 years at Royal Oaks Country club in Vancouver, WA. Those were the best years of my life. Now in Florida doing 6 cruises every year.
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