With the rapid proliferation of artificial intelligence, there are pressing concerns that it will replace jobs. Investment bank Goldman Sachs predicted in a 2023 report that this burgeoning technology would eliminate or reduce 300 million jobs and transform the workforce in the United States and Europe.
A recent study conducted by ResumeBuilder revealed that 37% of business leaders have already started replacing their staff with AI. Almost half (44%) of C-suite respondents say they expect further job cuts in 2024 due to AI efficiencies.
Many top companies have already announced plans to cut jobs this year while redirecting investment to generative AI and automation. Reallocating resources to AI investments is the primary way this emerging technology will impact the job security of white-collar professionals.
Companies make large AI investments as they reduce headcount
Amazon
Online retail giant Amazon announced Tuesday that it is cutting “hundreds of roles” in its One Medical and Amazon Pharmacy divisions. The company is cutting a number of jobs in other divisions in 2024, including Prime Video, MGM, Audible, Buy with Prime, and Amazon Pay divisions.
In an internal memo from Neil Lindsay, senior vice president of Amazon Health Services, obtained by Forbes, Lindsay said the company would “dedicate resources” to invest in “inventions and experiences” that directly impact customers and members. “We have identified areas where we can relocate.”
CEO Andy Jassy said on Amazon’s earnings call last week: [of] A key reason we’re able to instill so much focus and investment across Amazon is that few initiatives offer us the opportunity to reinvent so many customer experiences and processes. ” Jassy predicted that the technology “will drive Amazon’s revenue into the tens of billions of dollars over the next few years.”
Google recently laid off hundreds of employees across a variety of departments, including advertising, sales, engineering, hardware, and the Google Assistant team. Alphabet CEO Sundar Pichai said the cuts were aimed at “removing layers to simplify execution and increase speed in some areas.”
In January, Pichai warned employees in an internal memo about the possibility of further “role reductions” within the company in the coming months. “We have ambitious goals and will invest in big priorities this year,” he said in a message to Google staff. Verge. “The reality is that creating the capacity for this investment requires making difficult choices,” Pichai told employees. “We will continue to make decisions and some roles may be affected.”
At last week’s earnings conference, the CEO said: “We continue to invest responsibly in data centers and compute to support a new wave of growth in AI-powered services for us and our customers. We’re disciplined about how we run our company. You’ve heard us talk about our efforts to permanently redesign our cost base and improve speed and efficiency. That work continues. The team is working to focus on and execute quickly on key priorities, remove layers, and simplify our organizational structure.”
He added: “Across our various teams, we have scaled back some of our lower priority projects. This will allow us to invest in our growth areas and stay on track.”
Echoing Pichai’s sentiments, Alphabet CFO Ruth Porat said the company was controlling expense growth by “slowing the pace of hiring,” adding that she said “employee headcount is down year-over-year.” “I am doing it,” he pointed out.
microsoft
Last month, Microsoft eliminated 1,900 gaming-related roles, impacting about 8% of Activision Blizzard, Xbox, and ZeniMax employees. Microsoft Gaming CEO Phil Spencer wrote in an internal memo to staff: Our entire growing business. ”
In addition to the company’s acquisition of Activision Blizzard, Microsoft has an investment worth $13 billion and a 49% stake in OpenAI, which develops the chatbot ChatGPT.
Microsoft CEO Satya Nadella told investors during an earnings call last week. By bringing AI to every layer of our technology stack, we are winning new customers, driving new benefits and increased productivity. ”
Regarding the future of work, Nadella said: “A growing body of evidence shows the role that AI will play in transforming work. Our own research and external research shows that using generative AI for specific work tasks can increase productivity by 70%. It has also been shown to improve
As Microsoft expands its AI and cloud investments, the company remains “focused on improving efficiency at every layer of the technology stack and disciplined cost management across all teams.”
When discussing how organizations can improve profit margins, Microsoft CFO Amy Hood told investors that the company could “improve our AI-first approach without significantly increasing our workforce.” “We are reorienting our workforce towards the work of
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