Generative AI Leads to Workforce Reductions, Sparks Need for Employee Skill Evolution
Summary:
A PwC survey reveals that around 25% of global CEOs plan to reduce their workforce by at least 5% due to the implications of generative AI. The survey included over 4,700 CEOs across 105 countries, with 30% already having incorporated AI into their operations. Although AI is leading to layoffs in certain sectors, it is also creating new job opportunities. CEO responses indicate AI's potential impact on business models, while recent IMF analysis hints at AI's potential to affect 40% of all jobs and exacerbate inequality.
A new survey conducted by PricewaterhouseCoopers (PwC) reveals that approximately one-fourth of chief executive officers worldwide have plans to cut down at least 5% of their personnel due to the implications of generative AI. This survey, published on January 15, gathered feedback from more than 4,700 CEOs spanning 105 nations. Over half of these respondents hold leadership positions in organizations that garner an annual revenue north of $100 million. Just shy of one-third have reported that generative AI is an integrated part of their business operations, while a quarter foresee releasing at least 5% of their workforces due to its advent. Despite this, PwC's analysis suggest that any job cuts for efficiency's sake might already be balanced by new hiring strategies. For instance, though 14% of technology CEOs predict job cuts due to AI within the year, a predicted 56% hope to recruit new employees in 2024. Layoffs linked to generative AI are more probable within media, entertainment, banking, capital markets and insurance sectors, however, it is predicted that in areas such as engineering, construction, technology, metals, and mining there is more job security in relation to AI advancement. Approximately 70% of CEOs believe that AI will metamorphose their business model within a span of three years, necessitating the development of new skill sets for employees. This survey follows a piece of analysis shared by IMF managing director Kristalina Georgieva, claiming AI could potentially affect 40% of jobs and intensify income disparity. Georgieva implies that AI could deepen inequality because half of the jobs susceptible to AI could see productivity improvements from the technology's integration, which could lead to higher wages. Conversely, the remaining half might experience job displacement by AI, leading to wage decreases and fewer hiring opportunities. She added: “In the most extreme examples, some jobs may even become obsolete.” Georgieva concluded by emphasizing the importance of nations establishing social support systems and training programs for workers at risk from AI. At the World Economic Forum in Davos, where influential tech executives and global leaders will be present, the effects of AI technology are expected to be a hot topic.
Published At
1/16/2024 9:23:07 AM
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