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CEOs Say Generative AI Will Result in Job Cuts This Year (arstechnica.com) 96

Posted by msmash from the shape-of-things-to-come dept.
A quarter of global chief executives expect the deployment of generative AI to lead to headcount reductions of at least 5 percent this year, according to a survey unveiled as world and business leaders gathered in Davos, Switzerland. FT: Industries led by media and entertainment, banking, insurance, and logistics were most likely to predict job losses because of cutting-edge AI tools, according to the poll of top directors conducted by PwC ahead of this week's World Economic Forum. Engineering and construction firms were least likely to anticipate cuts because of automation, alongside technology companies. Some 46 percent of those surveyed said they expect the use of generative AI -- systems that can spew out humanlike text, images, and code in seconds -- to boost profitability in the next 12 months, the survey added. However, 47 percent said the technology will deliver little or no change. The findings, based on interviews with 4,702 company chiefs spread across 105 countries, point to the far-reaching impacts that AI models are expected to have on economies and societies, a topic that will feature prominently at the annual meetings.
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CEOs Say Generative AI Will Result in Job Cuts This Year More

CEOs Say Generative AI Will Result in Job Cuts This Year

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  • time to go union!

  • Good luck with that (Score:5, Insightful)

    by C3ntaur ( 642283 ) <centaur@netmagPL ... minus physicist> on Tuesday January 16, 2024 @12:49PM (#64163853) Journal

    "while we're nowhere near a place where bots can steal your job, we're certainly at the point where your boss can be suckered into firing you and replacing you with a bot that fails at doing your job"

    https://pluralistic.net/2024/0... [pluralistic.net]

    • Re: (Score:2)

      by NFN_NLN ( 633283 )

      > replacing you with a bot that fails at doing your job

      The Self-Checkout Experiment Failed - It's Time To Move On
      https://www.tastingtable.com/1... [tastingtable.com]

      • The Self-Checkout Experiment Failed - It's Time To Move On

        Yeah, we saw that story yesterday. The gist of it is that the machines actually work fine most of the time, the problems are that scummy people are more inclined to shoplift when they believe they can get away with it (which is a societal rather than a technological problem) and some luddites don't like self checkout registers out of principle.

        If you haven't kept up with things, retail pays over $15/hr in my state, and that's the starting salary at Target. [wftv.com] We're not going back to the days of rows of cashi

        • Re: (Score:2)

          by Junta ( 36770 )

          At *least* going back to the 80s, we never had a large complement of cashiers. They always would have the *option*, but only 4-6 actually open at a random time, maybe up to 12-16 during the holiday shopping season.

          I go into the store now and they have about 4 cashiers on registers and another 4 babysitting about 20 self-checkout places. About the same number of employees, but pushing through way more people per unit time. Also more workers providing for curbside pickup of a shopping orders.

          I know that it

          • And most of that is driven through unreasonable wage hikes pricing out a bunch of people (mostly younger ones and others that need to enter society) out of the market. Why would I hire a 16-18yo when I can hire someone with experience and a bit more sense at the same rate.

    • If a new tech can double your productivity, your boss can replace half of you with your most desperate coworkers.

      And this AI can shit out some stories/code/legal research etc well enough that the AI plus a babysitter can drastically increase productivity. Even if your job is safe from the chatbot, will your job pay as much if a bunch of newly unemployed people are offering to do it for less?

    • Re: (Score:2)

      by leonbev ( 111395 )

      Right now, there are plenty of organizations who have outsourced their 1st level tech support to foreign subcontractors who can barely speak English and can't offer any technical advice that's more complex than "turn it off and back on again".

      I can't see ChatGPT doing any worse than that.

      • Re: (Score:2)

        by jp10558 ( 748604 )

        Honestly, I think a lot of customer service chats would be improved - Amazon's "click from the 5 things we think it might be" "chat" system probably would be improved it if could take more options - assuming there was a way to feed that sort of stuff through an expert system for decision making. I wonder if they could just make a much wider system that classified via an llm down to the small number of choices available now? Or basically could be trained to "refund" vs "no refund" better.

    • Re:Good luck with that (Score:4, Interesting)

      by Darinbob ( 1142669 ) on Tuesday January 16, 2024 @01:54PM (#64164085)

      This is equivalent to your boss being suckered into firing you and hiring 4 offshore contracts at 1/4 the cost each and finding out they collectively are dumber than your empty chair. People have said this for a couple decades, but tech jobs, even tech desk jobs, are being treated like the new factory floor.

    • All this buzz about ai and automation has every single CEO going top to bottom through their entire org looking for things that they can automate.

  • not there yet (Score:5, Informative)

    by laktech ( 998064 ) on Tuesday January 16, 2024 @12:51PM (#64163863)
    I don't think we're there yet. More likel, job growth rate will be slowed as leadership pockets the efficiency gains of chatGPT requiring workers to do more with less.

    • Just wait till we get AI patents.

      Normal Business Activity, with AI!!!!!

      • Just wait till we get AI patents.

        Just wait until we get the Quantum AI that both simultaneously patents every invention possible, but also approves and processes the paperwork. Then, all your patents are belong to us.

  • Incomplete and sensationalist... (Score:3)

    by Chris Mattern ( 191822 ) on Tuesday January 16, 2024 @12:54PM (#64163875)

    25% of CEOs. What are the other 75% saying? How many are hiring more because of generative AI? How many new companies are being founded to use generative AI, and need to hire staff to do that?

    But this one fact cherry-picked out fits the narrative of "AI terk er jerbs", so that's the only one we'll use.

    • Re: (Score:2)

      by Hadlock ( 143607 )

      We're not hiring more but we expect to do additional volume (20%) with the same number of workers over the next couple of years. Just being able to summarize PDFs is a huge time saver by itself. The efficiency gains are obvious, a significant amount of backoffice tasks can either be fully or partially automated. You'll always need a human to handle override situations, but instead of a team of five accountants processing monthly expense reports, you might only need two, a lead, and a backup in case the lead

      • But turn it around: if you can do more and do it cheaper, that means you can do *more* and sell it, because you can sell for less at a profit. Not guaranteed, of course, but some people will see this dynamic.

        • Re: (Score:2)

          by HiThere ( 15173 )

          That depends on whether the market is saturated. Many things have a "needed amount", and when you overproduce it's just waste. Then, according to free market theory, the prices will go down, but this doesn't always happen.

          • Did not see an earthlink.net email since decades.

            The price can only go down to production + distribution + storage cost, and then you are at zero profit!

            To many people think you only need to produce enough and the price approaches zero. That is not the case.

            • Re: (Score:2)

              by HiThere ( 15173 )

              It can't even go that low...at least not sustainably. There's friction at every step. E.g. storing stuff in a warehouse isn't free. But it's also the case that when the profits start dropping, management tends to be reluctant to cut prices just to maintain market share.

        • Re: (Score:2)

          by Hadlock ( 143607 )

          We share the market with 3-10 other suppliers and there's a finite number of customers. While your statement is true for commodities, knowledge workers typically don't have much of a direct impact on those kinds of end products.

  • I'm skeptical, I'd like to see specific examples of typical jobs using it frequently, not pilot programs. I do agree it has a lot of potential, but it also has a lot of snags to be worked out.

    Maybe for cheapo ads where too few will notice or care if the model has 2 thumbs, but that's a small % of jobs.

  • That's less than the current rate

  • Are these the same ones that usually are wrong, overpaid, and listen to third-party "Magic Quadrant" fanatics?

    There's a lot of hype around GenAI however once you start digging under the covers it's only good for a few things that are narrow in terms
    of capabilities. I'm afraid many CEOs who bet the shop on this, as early adopters, don't consider that there will be a lot of reality soaking in.

    • I'm still trying to figure out, if every CEO is cutting their staff by 5%, extrapolating that out - if every company cut their staff 5%... wouldn't this immediately cut all sales 5%, all else equal?

      Or are these CEOs thinking that only they are going to cut staff, and nobody else is, so they will reap the benefit?

      I think it's going to be a while before those folks who lose their jobs are going to find whatever "new opportunities" folks like Gates are saying will appear to offset the losses. And if it's not

      • The quandary is that you know these CEOs are just dumb, they do the simple thing (cutting work force == big bonus for me). One one hand you can ignore this as general C-level ignorance. On the other hand though, even if it's a stupid idea, it'll happen and then it causes economic problems.

        The old advice I give, to not be a cookie-cutter worker who can be easily replaced by someone cheaper overseas still applies. It just expands to not just worry about cheap offshore work but worry about cheap/expensive A

      • Re: (Score:2)

        by ranton ( 36917 )

        I'm still trying to figure out, if every CEO is cutting their staff by 5%, extrapolating that out - if every company cut their staff 5%... wouldn't this immediately cut all sales 5%, all else equal?

        Why would cutting staff by 5% reduce sales by 5%? Depending on where the cuts are, it could mean customer service gets worse, new product development slows or reduces in quality, tech debt grows, etc. There are plenty of places to cut in a business without cutting sales. There are other negative impacts for sure, but not necessarily sales. At least not in the short term.

        • Because if everyone else is cutting jobs, there will be fewer customers to buy products and services.

    • Their Pavlovian reflex of "I can fire people" has been triggered, that turns off what's left of their brain.

  • AI is all over Davos this year (Score:3)

    by jacks smirking reven ( 909048 ) on Tuesday January 16, 2024 @01:04PM (#64163913)

    I was there last week doing AV setup before the conference and all the corporate takeover spaces are pushing AI, several "GenAI" pavilions from your friends at HCL, Accenture, Palantir, Amazon, Uber and more.

    It's no wonder it's at the top of mind and of course these companies are going to push it. "Buy AI services from us and you can cut payroll" is the pitch they are making.

    • Re: (Score:1)

      by Mordain ( 204988 )

      I'm sure the Davos crowd is quite happy to hear all this, since they are all about centralized control.

      • Look, I don't buy into the conspiracies around WEF and such but it's hard not to see what happens there for two weeks and not be somewhat grossed out.

        It's thousands of man hours and millions of dollars just to lobby to an audience of dozens to hundreds. You can see in real time how the wealthy live an alternate reality.

        • Re: (Score:1)

          by Mordain ( 204988 )

          You don't even need to read conspiracy theories about them, you just have to listen to what they say and read their material and it's obvious that they want to control and guide every facet of society toward their dream, which they don't really ever describe in detail what that dream would look like, but a simple examination of the changes they want to make doesn't make it look like one where we all benefit equally.

          • Yeah but that's not a conspiracy, that's just the uber-wealthy doing their uber-wealthy things.

            Their dream isn't really beyond growing more wealthy and staying more wealthy. These people are actually quite a bit stupider than we give them credit for and they are just that, people, people that worked hard somewhat but also were generally born and just got lucky.

            If they are so all powerful they couldn't stop a simple Dutch reporter from stealing the show 5 years ago?

            It's the rest of us that put them on some

        • Then you really do need to realize that many of the conspiracies around WEF ... aren't necessarily conspiracies.

          • Yeah, because they are not. Everything i saw there convinces me there is no master plan, there isn't this huge level of coordination and these people are feckless and greedy and far less deserving of the respect such thinking gives them.

            They just like money and want more money and act in the interest that gets them that more money. It's a big show and they probably like the idea that people think they are in control more than it's a reality.

  • Back in the seventies and eighties, as automation really kicked in, we were hearing about how the upcoming "information economy" was going to provide more and better jobs.

    Now, they've got nothing. Who's going to buy their crap, if people don't have jobs?

    I mean, unless we go back to the fifties, with a 90% top income tax rate for the rich, and the rest of us get a living BMI?

    • To buy his products. He needs them to tend land but it's easy enough to force them to do that at the tip of a spear or the barrel of a gun. You don't even have to directly threaten them you just have to control their access to food and shelter.

      America has a ruling class as does the entire world but in most countries that don't have overt dictatorships you're taught that there is no ruling class and you're taught that during the critical 4 to 14 time in your life when your brain is at its most malleable

  • Generative AI? I seriously doubt that!!...ML?... (Score:5, Interesting)

    by Somervillain ( 4719341 ) on Tuesday January 16, 2024 @01:36PM (#64164025)
    ...Machine Learning?...theoretically, yes, but 5% this year is far too aggressive. If you developed a program that could do someone's job perfectly, it would take more than a year to transition from human-only to software-only. Look at how long it took to get internet technologies rolled out through corporate America. How long is the average SAP/Peoplesoft deployment?

    ChatGPT is pretty useless for any task you presently pay workers to do. It's just fancy autocomplete and it's capabilities are greatly overstated as anyone who actually plays with it can tell you. Anything it does is riddled with errors are far too dangerous to trust with any work you pay someone to do today. Time will tell, but I am confident Generative AI itself theoretically has very limited use.

    If you're paying someone today to write it, it either has to be as compelling as possible, like advertising or a screenplay or needs to be perfectly correct, like a contract or tech manual. If you can tolerate ChatGPT-level errors, you're not spending money today to have a human being do it. Sure, it can augment existing workers, but historically, companies have used error-prone labor savers as means of increasing output, not decreasing headcount...certainly 5% this year is too ambitious even under that scenario because even if ChatGPT wasn't so error-prone, it would take more than a year just to adapt it into workflows.

    I can see other AI technologies, like machine vision or machine learning, eliminating some jobs, but again, history has shown, that job eliminations are rare as most automation technologies are used to keep the same headcount, but increase output or allow a specialized worker to work in more areas.
    • I think it's less about replacing workers outright as making workers more efficient. That can lead to a lower need for workers---if you aren't growing.

      • I think it's less about replacing workers outright as making workers more efficient. That can lead to a lower need for workers---if you aren't growing.

        The sticking point is the 5% headcount reduction this year. That is very specific. Also, a company being satisfied with being stable is very rare. Seems like it would be normal, but I seriously have never heard of one. CEOs justify their pay based on growth (they frequently don't deliver, but that's a different discussion). Have you ever heard of a business where they're not trying to grab sales from a competitor or just find ways to get more sales from their existing customers?

        But taking a step ba

    • ChatGPT is pretty useless for any task you presently pay workers to do. It's just fancy autocomplete

      How many jobs have been eliminated by autocomplete?

      It must be a nonzero number, because there are just fewer errors to be corrected, and there are people paid to correct errors. Fewer errors means fewer jobs means autocomplete has taken people's jobs away, and you don't think a fancy autocomplete can take away jobs?

      If AI generation of art can do even just 25% of an artist's job, then somewhere between 0% and 25% of artists are no longer needed for the same amount of output. Let's just point at the middle, e

    • Oh, they're going to cut the jobs all right, because the executives are telling the CEOs they can. But very soon, reality will set in, and they'll have to start rehiring again because they'll find out that AI can't actually think.

      • What are executives doing?
        Sending emails around.

        So the most likely jobs replaced by "chatbots" are executives, they are the most easier to be replaced by automation!

        • Very true. And if the executives were replaced by AI, most employees would probably see it as an improvement! Sadly, executives are also very good at surviving, so I doubt AI is coming for them just yet.

    • How about all that inflation and supply chain BS they fed everybody which resulted in record profits or huge gains proving they were all lying. Now some are lowering prices but that means profits are down and to keep them from dropping as much this is a good time to lay off people and try out AI to maintain or try to keep up profit levels... just and idea some must be having... just laying off workers also helps.

      One could wonder what happens with the drop in profits over the next year and how they will cou

  • expect the deployment of generative AI to lead to headcount reductions of at least 5 percent this year,

    Remove 5 percent of heads. I'm presuming they're marrying Boston Scientific robots with AI so they don't have to pay someone to remove heads. Just set it and forget it.

  • Let's be honest, AI is already great at having "visions" (there called hallucinations) and dispensing wisdom the average magic-8-ball can provide is also something AI can do sufficiently well.

    We could literally save millions here, just by firing one single dud!

  • There you have it - "AI can cut your staff by 5%" is what these sales droogs must be pitching c-levels. Given all the buzz surrounding AI these days, what counter point are C-Levels suppose to believe?

    • If you can replace 5% with AI you can save 10% by hiring some competent programmers. Itâ(TM)s that simple, if current LLM benefits you, you are already doing a poor job. In the 2000s everyone too incompetent for the computer transition went into accounting, HR and administrative roles. Most of those could be cut 20 years ago, and that is why startups have been so *innovative* in comparison with established players purely because they do not have entrenched bureaucracy. LLM will end bureaucracy, it will

  • If you do your job robotically, then expect to be replaced by a robot.

  • They are completely worthless positions that could easily be done by any, even the dumbest, LLM and the company wouldn't even notice.

  • A proper capitalist would keep his smart workers to produce more goods and sales. Alas greed is greater than cleverness.

  • ...the easiest job at a company to replace with a chatbot is the CEO.

    You have a company full of people who do actual work, and one person who talks a lot of nonsense and makes occasional decisions based upon whatever text is fed upon that week.

    Which do you think a generative AI chatbot is best suited to replacing?

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