At least your old coworkers are making more money

now that AI has cost you your job at Klarna.

 

 

 

 

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 simple to see why these claims became popular.

Industry titans such as IBM, for example, implemented measures that rattled staff across multiple departments. CEO Arvind Krishna declared in May of last year that he would no longer be hiring for non-customer-facing professions, with the goal of eventually automating such work.

Human resources were the first to be singled out when the corporation embraced AI and began speaking platitudes like “optimizing,” “streamlining,” and other trendy phrases.

Amidst a broader movement toward role automation that was labeled as “brutal” at the time, BT also revealed its intentions to terminate tens of thousands of employees.

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.

In an interview with the Financial Times at the end of August, CEO Sebastian Siemiatkowski revealed the company plans to halve its workforce in the coming years, taking the headcount down from 3,800 people to a goal of around 2,000.

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, according to Siemiatkowski at the time, highlights the “deep impact” that technology will have on society. There will be a significant impact on both the bottom line of corporations and the large number of workers who are surplus to needs.

Unfortunately, things were always going to be this way. While there is much talk about “enhancing worker productivity” and how new technology might reduce workloads, businesses that see these use cases come to pass will be rubbing their hands at the prospect of firing more employees and automating more parts of their business.

If Siemiatkowski’s remarks are any indication, the only consolation for workers is that those who stay might have an easier time getting by and make more money.

Siemiatkowski stated in an interview with BBC Radio 4 that when people in some company sectors become more important and get paid more to make up for it, AI should be seen as a “positive development.”

For everyone else, things are not looking good. Early predictions that AI will create an equal number of jobs as it replaces are starting to seem like hollow platitudes meant to allay public fear.

According to a report released earlier this year by the International Monetary Fund (IMF), artificial intelligence (AI) is expected to affect approximately 40% of all jobs worldwide and might potentially exacerbate inequality.

Siemiatkowski is just vocalizing what other business executives have been saying about the loss of jobs due to AI. All that has changed is that, although Krishna from IBM retracted his remarks made in the middle of 2023, this strategy is no longer seen as unacceptable.