Now that AI has cost you your job at Klarna,

at least your former coworkers are getting paid more.

Many will suffer from the unrelenting pursuit of AI-driven productivity improvements, while a select few may benefit.

Even while predictions of a massive loss of jobs due to AI haven’t fully come true over the past two years, it’s still too early to say that detractors have jumped the gun. Some companies are demonstrating the reasons why employees should start to worry.
When generative AI was introduced in late 2022, detractors of the technology became hysterical. Famously, Goldman Sachs predicted that within ten years, automation would eliminate over 300 million jobs. It’s also easy to understand why these assertions gained traction.

Big giants in the sector, like IBM, for instance, took actions that made employees in a variety of company functions shudder. In an effort to eventually automate non-customer-facing positions, CEO Arvind Krishna announced plans to halt hiring for those positions in May of last year.
In this case, human resources were targeted when the business turned to AI and began spewing forth standard corporate speak like “optimizing,” “streamlining,” and other top hits.

Similar intentions to lay off tens of thousands of employees were also revealed by BT as part of a broader trend toward role automation, which at the time was referred to be “brutal.”

These were, for many, the first concrete signs that many roles will eventually become obsolete due to technology. Although some would have you believe that an onslaught was imminent, they are not entirely incorrect.
The fact that companies are now providing concrete examples of how AI can be used to eliminate jobs, more than a year after these occurred, is troubling. It seems like Klarna is spearheading this effort and establishing an unsettling standard.

CEO Sebastian Siemiatkowski disclosed the company’s intention to reduce headcount from 3,800 to approximately 2,000 employees in the upcoming years in an interview with the Financial Times at the end of August.

The ‘buy now pay later’ startup boasted a 5,000-strong workforce just over a year ago, before implementing an AI-inspired hiring freeze. In the time since then and now, it’s cut roles across the board.
Siemiatkowski has been highly vocal about the potential of AI at the startup, and more broadly across the enterprise landscape. In February, the company revealed its AI assistant was doing the work of around 700 customer service employees.

This, Siemiatkowski said at the time, underscored the ‘profound impact’ the technology will have on society. The impact will indeed be profound, both on the bottom line for businesses and the droves of workers who find themselves surplus to requirements.

It was always going to be this way, unfortunately. For all the talk of ‘enhancing worker productivity’ and using this technology to lighten workloads, enterprises seeing these use cases unfold will be rubbing their hands at the thought of shedding yet more staff and automating various aspects of their operations.

The only solace workers can take – if Siemiatkowski’s comments are anything to go by, is that those who remain may be in for an easier ride and better pay.
In an interview with BBC Radio 4, Siemiatkowski suggested that AI should be viewed as a “positive development” for workers in some business verticals as their importance grows and pay rises to compensate for that.

For everyone else, the outlook is bleak. The early claims that AI will create as many jobs as it renders obsolete are beginning to look like empty gestures intended to prevent widespread panic.
A report from the International Monetary Fund (IMF) earlier this year suggested AI will impact around 40% of all jobs globally, and has the potential to “worsen overall inequality”.
Siemiatkowski, like other industry execs, is merely saying the quiet part out loud with regard to AI job losses. The only difference now is that while IBM’s Krishna backtracked on his comments in mid-2023, this tactic no longer seems taboo.