Technology workers are beginning to experience the impact of being replaced by artificial intelligence. IBM announced on Monday that it would temporarily halt hiring for positions that AI could potentially fulfil. This is the most assertive declaration from technology companies increasingly turning to AI to improve efficiency.
Imagine being informed that not only have you lost your job, but your superiors believe that artificial intelligence can fill your position. This is the reality that technology workers are facing. According to a Bloomberg report on Monday, IBM is planning to temporarily halt hiring for positions that AI can perform more effectively.
This puts 7,800 jobs at the technology giant at risk of being permanently eliminated. Since the launch of ChatGPT, technology CEOs have been competing to determine if the generative AI technology behind the popular chatbot is more than just a novelty and can fulfil its potential to fundamentally transform the way their businesses operate.
Earnings calls from technology companies such as Meta, Alphabet, and Microsoft have been filled with mentions of artificial intelligence. The consensus among leaders is becoming increasingly clear: AI has the potential to make certain jobs obsolete. The timing of this increased focus on AI is not accidental. Challenging economic conditions have coincided with the emergence of generative AI, allowing companies to implement layoffs that improve their efficiency. While some business leaders maintain that AI will create new job opportunities, others, such as Microsoft’s CEO Satya Nadella, acknowledge that companies will need to learn to do more with fewer resources.
According to a recent note from Morgan Stanley, AI does not necessarily have to replace existing jobs to have an impact. Instead, AI can slow future hiring growth while increasing a smaller workforce’s productivity. Some have dismissed this as a vanity metric. If AI proves successful in this regard, jobs lost through recent layoffs may never return. In the technology industry alone, over 350,000 people have lost their jobs since last year, as the online tracker Layoffs reported.
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As a longstanding player in the technology industry, IBM has successfully navigated numerous changes and trends throughout its 110-year history. The company has often been ahead of the curve in order to remain competitive. Its current CEO, Arvind Krishna, has no intention of deviating from this approach. In an interview with Bloomberg on Monday, Krishna stated that IBM would temporarily halt hiring for positions that AI could fulfil.
This could include roles in back-office areas such as human resources, with estimates suggesting that up to 7,800 jobs could be lost. These plans to replace workers with AI, announced by the company earlier this year, are the most direct and explicit yet from a technology firm.
Amazon has been one of the technology companies most affected by the economic downturn that began in 2022. Despite already announcing two rounds of layoffs that will impact 27,000 workers, the company appears to be ready to invest heavily in AI to fill the gaps.
During an earnings call last week, Amazon’s Chief Financial Officer Brian Olsavsky stated that the company is increasing its investment in large language models and generative AI while reducing its spending on core fulfilment and transportation. This will free up resources for Amazon Web Services, the company’s highly profitable division. Olsavsky explained that this shift in spending is allowing the company to repurpose resources from fulfilment and transportation to AWS.
On April 27, Dropbox CEO Drew Houston announced that the company would be laying off approximately 16% of its workforce, or around 500 employees. In a letter to employees, Houston explained that with growth slowing, it was time to recognize that the era of AI computing had arrived.
Although he did not explicitly state that AI would replace workers, the layoffs coincide with Dropbox’s renewed focus on the technology. Houston acknowledged that AI had captured the world’s imagination but has also alerted the company’s competitors to many of the same opportunities.
Mark Zuckerberg, who coined the term ‘Year of Efficiency,’ has been particularly vocal about the need for cost savings. When announcing layoffs, he emphasized the importance of being ‘flatter’ and ‘leaner.’ It should come as no surprise, then, that Meta is incorporating AI into its workforce on a large scale.
In March, Zuckerberg stated that his largest investment was in advancing AI and integrating it into the company’s products. At the same time, he announced that 5,000 open positions that had not yet been filled would be closed. CEOs like Zuckerberg have undoubtedly considered AI’s cost advantages and other efficiencies over human workers.
In March, Mark Zuckerberg stated that focusing on the long term means investing in tools that will keep the company ahead for years. This may involve finding ways to automate workloads over time or identifying and phasing out obsolete processes.
Microsoft has a history of replacing workers with AI. In 2020, the company laid off some employees responsible for managing news homepages and replaced them with robots. The company is now investing heavily in the development of OpenAI’s large language model, having announced a multi-billion dollar investment. This investment appears to be paying off, as evidenced by the company’s recent earnings call. Microsoft’s Chief Financial Officer Amy Hood reported that the company’s revenue for the three months ending in March, which exceeded $52.9 billion, surpassed expectations due to the focused execution of its sales teams and partners