"AI Is Not Replacing Workers" And Other Lies About AI

Here are some lies companies have been telling us related to AI.

Image made with DALL-E 3

So far, we have seen many companies launching products with the popular “AI-powered” tagline as a marketing tactic. However, due to this rush to release AI products as quickly as possible, we see that these products often have little relevance to users or simply don’t work.

For example, a package delivery company called DPD implemented an AI online chat to answer customer questions. However, the implementation was a complete failure. It was not only useless in responding to relevant questions about each customer's order, but also generated quotes from poems or, in some cases, curses, so we can say it ended up ignoring the very rules it was programmed to follow.

Here's another clear example from Australia. A group of academics used AI-generated material in their presentation to the Australian Parliament regarding an investigation into the financial audits and consulting services provided by the Big Four to various banks in the country.

What do you think happened?

The AI invented a lot of information, including scandals that never existed, implicating Deloitte and KPMG, who had nothing to do with the investigation and no connection to it. It's clear that no one on the team took the time to read what they were presenting to their audience. They eventually had to issue a public apology for it.

On the other hand, there are companies successfully integrating AI, such as NVIDIA and OpenAI, to name a few. This marks a new approach to how this technology is being used.

It's no longer about CEOs making extravagant promises about AI's capabilities, but rather making realistic ones. They told us that AI would be our assistant and create new jobs. Their intention, as conveyed in their speeches, was always that we would not be replaced.

But what if that’s simply not true?

It's not about replacing humans in the loop; it's about empowering humans through an AI assistant, said Satya Nadella, CEO of Microsoft.

A bit hard to believe now, isn't it?

Although he later contradicted his initial speech, he couldn't keep hiding the reality. Many of us use ChatGPT, to varying degrees, for personal and professional projects. This suggests that while AI might create new jobs, it could eventually replace us, as it constantly acquires more and more information on various topics—information that we ourselves are providing. So, while this replacement might not happen quickly, it does have the potential to occur eventually.

You may have noticed that since 2022, there have been many layoffs in the tech industry. The narrative is that this is due to overhiring during the pandemic. This would make sense for 2022 and even 2023. But now, in 2024, we are still seeing massive layoffs.

If companies were struggling to make profits, the explanation would be as simple as the economic cycle. However, strangely, some of the world's largest companies are seeing unprecedented profits. Yet, despite this, they continue to lay off staff.

Change in Head Count vs. Annual Net Income - https://www.profgalloway.com/corporate-ozempic/

In 2022, tech companies laid off more than 165,000 employees, and 260,000 in 2023.

Tech Layoffs since COVID-19 - layoffs.fyi

Furthermore, projections for 2024 estimate that the number of layoffs will reach 270,000. So, if companies are doing well financially, why are they showing workers the door?

Marketing professor Scott Galloway believes that "there's something else going on." In his recent publication, he analyzes the impact of AI on corporations, stating that "AI is playing a larger role in layoffs than CEOs are willing to admit."

We typically think of AI-related job replacements as someone working on their computer one day, analyzing company data, and suddenly being replaced by AI. However, the reality is more nuanced than that.

As companies gradually better understand how AI can assist in their operations, they will create better teams and structures, leading to improved results. Essentially, instead of having three people do a particular job, it will be one person doing the work of four with the help of AI.

The problem is that none of these companies are being completely honest about this. If a CEO has been promoting AI as the best thing to happen to the industry and then lays off 30% of their staff because of it, it doesn’t make sense. This is exactly what happened with Microsoft, Xbox, and Activision Blizzard. The hypocrisy is clear, and it makes us skeptical.

In 2024, it seems the truth is slowly coming to light. There are signs everywhere.

IBM CEO Arvind Krishna made headlines when he mentioned that they plan to pause hiring for roles that could be replaced by AI. The same thing happened with UPS, where recently, their CEO, Carol Tomé, acknowledged that AI is playing a significant role in employee layoffs. This came after UPS had the highest number of layoffs in its history, amounting to 12,000 workers being let go.

In both cases, spokespeople later clarified that "AI is not replacing workers." This is essentially a statement to protect their public relations and appearances.

Another case involves a Shopify employee who broke their confidentiality agreement to reveal that the company has been secretly laying off employees due to AI.

Additionally, tech industry media and television producer Tyler Perry was planning an $800 million expansion of his studios. However, he halted operations after seeing the results of OpenAI's Sora. He later commented, "I am very, very concerned that in the near future, a lot of jobs are going to be lost."

AI Jobs: Changes in Employment and the Economy

Since the AI craze began, you’ve probably heard the phrase: "AI will not replace humans, but humans who use AI will replace humans who don't." There’s definitely some truth to that. But we’re not considering the jobs that will be completely eliminated.

A recent report by McKinsey mentions that American workers may need to change jobs by 2030. Additionally, lower-wage workers are 14 times more likely to be affected.

Fields like STEM, healthcare, construction, and other professional areas will continue hiring staff. However, generative AI could significantly change jobs in areas like customer service, sales, and office support.

There are numerous reports saying that AI will add hundreds of millions to the economy in the next decade and positively impact GDP. While this might happen, right now we can only evaluate various scenarios of where our future careers might be headed.

Final Thoughts

After reading all this, you might think I’m against the idea that AI benefits our jobs. However, if you’ve read other articles I’ve shared, you know I always talk about the amazing and impressive advancements in AI technology. The goal of these articles is to keep us focused on what’s happening, especially how the labor market is being impacted by the constant integration of AI.

We need to ask ourselves if the tools or technological assistants we rely on are displacing us from the job market in the pursuit of increased corporate productivity.