Traces of artificial intelligence remain in the mass layoffs and downsizing of major companies such as Meta, Amazon, Salesforce, and YouTube, raising concerns about the disappearance of jobs due to AI. white collar worker.
AI may hurt demand for white-collar workers, but there is reason to hope, believes Goldman Sachs CEO David Solomon. The dynamic American workforce will evolve just as it has in the past, Solomon told CNN in an interview.
Speaking at the Goldman Sachs 10,000 Small Businesses Summit in Washington, Solomon cited the chaos caused by the invention of the steam engine in the late 1700s, which helped fuel the first industrial revolution.
“There will be disruption, but I believe our economy is very nimble and flexible, and if you look at the technology that has trickled into our society over hundreds of years, we adapt,” Solomon said. “We’re looking for new business. We’re looking for new jobs. I don’t think this time will be any different.”
Of course, such an adjustment process can be difficult. This is especially true for workers whose careers have been marginalized by new technologies.
The key difference this time is the explosive pace at which AI is being embraced by businesses and how quickly AI itself is advancing. According to a survey of bankers conducted by Goldman Sachs, 37% of clients are using AI in regular production, and adoption is expected to reach 50% in the next year and 74% in the next three years.
ChatGPT was launched in November 2022 and is currently available It boasts 800 million weekly active users.. Parent company OpenAI is reportedly preparing the foundation for an IPO. Its value is estimated at up to $1 trillion.
Today’s AI chatbots conduct in-depth research, create incredibly realistic movies, compose music, Report financial fraud immediately Even before it was done.
That pace could make the transition even more bumpy this time.
“The pace of adoption of this technology is picking up a little faster. We may see a little more near-term disruption as companies struggle to deploy technology and automation,” the Goldman Sachs CEO said. “But our economy is incredibly broad and agile.”
Office workers can be especially exposed to this disruption.
Amazon CEO Andy Jassy told analysts that the company’s recent 14,000 layoffs were “not really even caused by AI,” but he said in June: Adopt generative AI and AI agents The company’s corporate workforce will be reduced..
Meta recently cut 600 roles within its AI team. report marked This is part of our efforts to move more agilely. This week, YouTube began offering voluntary buyouts to its U.S. employees as part of its AI-focused restructuring.
Employees at online education company Chegg are being harmed by AI in two ways. First, the emergence of ChatGPT is reducing demand for Chegg’s education services. Second, Chegg itself is investing in AI, promising to run its business more efficiently with fewer employees to compete with. This week, Chegg said it would. Reduce almost half of the workforce We are working to address the “new reality of AI” and low search traffic.
AI was responsible for 17,375 layoff announcements this year, according to tracking by outplacement and coaching firm Challenger, Gray & Christmas through the end of September. This represents less than 2% of all layoffs announced this year.
However, Challenger noted that this tally likely falls short of AI-related layoffs. Another 20,219 job cuts announced during the period involved companies citing unspecified technology updates, some of which may be related to AI.
“There will be less demand for some white-collar clerical jobs, but there will be hiring from other parts of the economy,” Solomon said.
In contrast, Anthropic CEO Dario Amodei warned that AI could eliminate half of entry-level white-collar jobs and increase unemployment by up to 20% in the near future.
“I don’t think the public, politicians and lawmakers are fully aware of what’s going on,” Amodei told CNN’s Anderson Cooper in May. “We must act now. We cannot just sleepwalk.”
Federal Reserve Chairman Jerome Powell said at a press conference that “a significant number of companies” are either laying off workers or not hiring as much, in part because of AI.
“We’re watching this very carefully. This could absolutely have an impact on job creation,” Powell said.
A survey of more than 100 Goldman investment bankers found that only 11% of U.S. companies are “actively reducing their workforce due to AI,” according to a report released last week. However, for technology, media and telecom companies, this figure rises to 31%.
Goldman Sachs bankers expect AI to lead to a “moderate headcount reduction” of 4% next year. However, this figure could increase by as much as 11% over the next three years. This is especially true in the area of customer service.
Jan Hatzius, Goldman’s chief economist, wrote that the findings support the bank’s view that AI will have a transformative impact on labor markets and the economy.,” And this rapid adoption is a sign that “AI’s impact on the U.S. labor market may be arriving sooner than expected.”
The AI boom has also raised concerns that a bubble may form in this hot market segment.
Solomon said many “great companies” will be formed during the AI boom, but at some point the abundance may become too much and there will not be a “straight line” in value.
One scenario he laid out is that demand for AI services may fail to meet high expectations at some point, causing valuations to decline.
However, as Solomon points out, this process may take time to play out because most public technology companies are well-established and modern AI companies are mostly still in private markets where valuation cuts are slowly shifting.
“This technology is exciting. There has to be a lot of passion for it.” Solomon said: “But there will be obstacles along the way.”
–CNN’s Alicia Wallace contributed to this report.
