Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

IBM To Stop Hiring For Roles That Can Be Replaced By AI; Nearly 8,000 Workers To Be Replaced By Automation
Nation and State ^ | 05/01/2023 | Tyler Durden

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".


TOPICS: Business/Economy; Culture/Society; Front Page News; News/Current Events; Technical
KEYWORDS: ai; automation; elonsnightmare; ibm; layoffs
Navigation: use the links below to view more comments.
first 1-2021-4041-47 next last

1 posted on 05/01/2023 9:08:41 PM PDT by SeekAndFind
[ Post Reply | Private Reply | View Replies]

To: SeekAndFind

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.


2 posted on 05/01/2023 9:13:12 PM PDT by bigbob
[ Post Reply | Private Reply | To 1 | View Replies]

To: bigbob

Whew...there are no mechanical engineers listed to be replaced by AI. What a relief!


3 posted on 05/01/2023 9:15:48 PM PDT by entropy12 (Food is most popular anxiety drug, exercise is the least popular.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: SeekAndFind

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.


4 posted on 05/01/2023 9:17:00 PM PDT by GOPJ (John Adams said that “Our Constitution was made only for a moral and religious people.”)
[ Post Reply | Private Reply | To 1 | View Replies]

To: entropy12

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 ).


5 posted on 05/01/2023 9:18:17 PM PDT by SeekAndFind
[ Post Reply | Private Reply | To 3 | View Replies]

To: bigbob
Seems to me that 100% of congressional staff could be replaced by AI as well as 95% of federal agency staff.

That would be an improvement...

6 posted on 05/01/2023 9:18:26 PM PDT by GOPJ (John Adams said that “Our Constitution was made only for a moral and religious people.”)
[ Post Reply | Private Reply | To 2 | View Replies]

To: SeekAndFind
IBM has a severe case of MBA amnesia, remember Watson ?
7 posted on 05/01/2023 9:18:53 PM PDT by SecondAmendment (This just proves my latest theory ... LEFTISTS RUIN EVERYTHING !!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: SeekAndFind

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.


8 posted on 05/01/2023 9:21:57 PM PDT by rellic
[ Post Reply | Private Reply | To 1 | View Replies]

To: SeekAndFind

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.


9 posted on 05/01/2023 9:36:11 PM PDT by entropy12 (Food is most popular anxiety drug, exercise is the least popular.)
[ Post Reply | Private Reply | To 5 | View Replies]

To: SeekAndFind

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.


10 posted on 05/01/2023 9:42:46 PM PDT by lee martell
[ Post Reply | Private Reply | To 1 | View Replies]

To: GOPJ

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.


11 posted on 05/01/2023 9:46:24 PM PDT by Jonty30 (Black widow spiders aren't the only species that eats their mate after finishing with them. )
[ Post Reply | Private Reply | To 4 | View Replies]

To: SeekAndFind

Well, on the positive side, can those laid off and fired folks start with the Indians? Maybe now we can get rid of them.


12 posted on 05/01/2023 9:51:26 PM PDT by Reno89519 (Go Woke, Go Broke. Every Time Trump Says Something, I'm Closer to Anyone But Trump.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: bigbob
as well as 95% of federal agency staff

Only if you can get AI to vote..... 🤣🤣🤣🤣

13 posted on 05/01/2023 9:58:04 PM PDT by Lockbox (politicians, they all seemed like game show hosts to me.... Sting)
[ Post Reply | Private Reply | To 2 | View Replies]

To: Reno89519

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.


14 posted on 05/01/2023 9:58:41 PM PDT by entropy12 (Food is most popular anxiety drug, exercise is the least popular.)
[ Post Reply | Private Reply | To 12 | View Replies]

To: bigbob

“congressional staff”

Let’s start with congress critters.


15 posted on 05/01/2023 10:06:16 PM PDT by ProtectOurFreedom (I don’t like to think before I say something...I want to be just as surprised as everyone else…)
[ Post Reply | Private Reply | To 2 | View Replies]

To: All
Goldman predicted that AI could lead to some 300 million layoffs among highly paid, non-menial workers in the US

That is truly amazing considering there are currently only about 158 million people employed in the U.S.

Total employment and the unemployment rate in the United States from 1980 to 2021, with projections until 2027

Apparently AI is so amazing it's going to replace 142 million workers that don't even exist.

16 posted on 05/01/2023 10:21:48 PM PDT by TigersEye (Woke is a cancer of the mind and humanity)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Jonty30

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)


17 posted on 05/01/2023 10:27:32 PM PDT by Freest Republican (This space for rent)
[ Post Reply | Private Reply | To 11 | View Replies]

To: Reno89519
start with the Indians?

Excellent point. Artificially intelligent chatbot describes most Indians.

18 posted on 05/01/2023 10:41:03 PM PDT by Reeses
[ Post Reply | Private Reply | To 12 | View Replies]

To: GOPJ

“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).


19 posted on 05/01/2023 10:50:50 PM PDT by steve86 (Numquam accusatus, numquam ad curiam ibit, numquam ad carcerem™)
[ Post Reply | Private Reply | To 4 | View Replies]

To: TigersEye

This article was probably written by an AI bot.


20 posted on 05/01/2023 11:12:45 PM PDT by Alberta's Child ("I've just pissed in my pants and nobody can do anything about it." -- Major Fambrough)
[ Post Reply | Private Reply | To 16 | View Replies]


Navigation: use the links below to view more comments.
first 1-2021-4041-47 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson