A decade after technology started to replace and alter manufacturing occupations, artificial intelligence is making its way to corporate office leadership positions.
The list of white-collar layoffs is practically daily and includes recent layoffs from UPS, Google, and Duolingo. Even if generative AI hasn’t directly eliminated many jobs overall, some of these businesses and others have connected employment losses to new productivity-enhancing innovations like machine learning and other AI applications.
Additionally, generative AI may soon displace a far larger percentage of white-collar employment, according to signals from business executives and management consultants. Different from earlier automation technology waves, generative AI does more than just accelerate repetitive activities or forecast outcomes by identifying patterns in data. It is capable of producing information and combining concepts, essentially performing the knowledge labor that millions of people currently perform in front of computers.
This includes management positions, many of which, according to experts and business leaders, may never return. They forecast that work currently done up and down the corporate ladder in fields ranging from chemicals to technology will be revamped or replaced by the rapidly emerging technologies.
Many critical-thinking, white-collar positions may be enhanced or replaced by this wave of technology, according to Andy Challenger, senior vice president of the outplacement company Challenger, Gray & Christmas.
The changes brought about by AI are directly responsible for some of the job layoffs that have already occurred. Other businesses are reducing staff in order to invest more in the potential of artificial intelligence and to meet increased operational demands.
Business executives claim that AI may have different effects on headcount in the future. Executives at Chemours, a chemical firm, anticipate that they won’t need to hire as many people going forward.
Chief Executive Mark E. Newman stated, “As the company grows, we’ll need fewer new hires as opposed to having to do a significant retrenchment.”
AI-related job losses are increasing
According to Challenger’s calculation, since last May, businesses have blamed AI for more than 4,600 job losses, mostly in the tech and media industries. Since many businesses haven’t directly connected job losses to AI deployment in layoff announcements, the firm predicts the total number of AI-related job losses is probably greater.
In the meantime, a growing proportion of professionals are now utilizing generative AI in their day-to-day jobs. According to Oliver Wyman Forum, the research arm of management consulting firm Oliver Wyman, which conducted the survey, the majority of more than 15,000 employees in industries ranging from financial services to marketing analytics and professional services said they were using the technology at least once a week in late 2023, a significant increase from May.
Compared to 54% of blue-collar professionals who had integrated generative AI into their work, over two-thirds of those white-collar employees claimed that their productivity had increased as a result.
In an effort to reduce expenses and increase spending on artificial intelligence (AI) research, Google fired hundreds of workers in business divisions last month, including those involved in hardware and internal software tools. The same week, the language-learning software provider Duolingo announced that it had let go of 10% of its contractors and that artificial intelligence will take over for them in terms of content development.
Similar AI transitions have been made by businesses outside of the tech sector.
UPS announced that it will eliminate 12,000 jobs, mostly from management and a small number of contract workers, and that even if the package-shipping industry recovered, those roles were unlikely to reappear. The business has increased the amount of machine learning it uses for tasks like figuring out how much to charge clients for shipments. The company’s pricing department has so required fewer personnel.
According to UPS spokesperson Glenn Zaccara, the usage of generative AI and related technologies is also altering some professions at UPS “by reducing repetitive tasks and physical stress.”
Collapse of middle management
The Oliver Wyman study predicts that as AI usage increases, organizational hierarchies will probably change. As more of their jobs are taken away, entry-level employees are probably going to take the initial hit. Future entry-level jobs will therefore resemble first-level managerial positions more closely.
The analysis suggests that the cascading impact may level the middle management hierarchy, which serves as a training ground for top leadership positions.
While 43% of middle managers and 38% of first-line managers believed their work may be automated by generative AI, more than half of top white-collar managers surveyed for the study agreed.
Business executives from all sectors of the economy, however, anticipate that new technology will enhance and elevate some white-collar jobs, enabling staff members and managers to perform more significant work for their organizations and personally.
That’s already occurring, according to officials at Prosus, a multinational technology investment organization with headquarters in the Netherlands, as AI automates more activities for its personnel.
Engineers, software engineers, and other professionals can complete tasks twice as quickly, according to Euro Beinat, global head of AI and data science at Prosus. “Many of these employees can do slightly different things and more than we were doing before, which is one of the side effects.”
For example, the web designers at Prosus used to ask software developers to handle the coding. Beinat claims they can do it themselves now. Software engineers can concentrate more on intricate code and design in the interim. “A seniority boost,” he described it as.
Over the previous three years, the business has taught about 1,000 office and lab staff in AI applications at Chemours, a DuPont offshoot. Because they have been trained to use no-code analytic tools, financial professionals who previously had to spend a lot of time copying and pasting information between spreadsheets and systems are now able to create reports considerably more quickly, according to Matt Abbott, chief enterprise transformation officer at Chemours.
Instead of spending all of their time on system queries, the finance team can now focus on other business-critical issues, according to Abbott.
