IBM Suspends 7,800 Jobs: Exploring AI's Role in Workforce

There is no doubt that AI has taken the world by storm, but as the tech giant IBM continues to grow, it has recently announced that it has suspended 7,800 new job hirings as IBM looks to see if AI can replace workers in these roles. What challenges does AI present, what exactly does IBM think can be automated, and what dangers does this pose going forward?

What challenges does AI currently present in employment?

Artificial Intelligence (AI) has rapidly evolved over the past few years, with its application spanning various industries. However, this advancement in technology comes with several challenges, one of which is its role in employment. As AI continues to gain prominence, it is becoming increasingly evident that it will disrupt the job market in several ways.

One significant challenge AI presents is the displacement of human labour. Many jobs that humans previously carried out are now being automated with the help of AI. This has resulted in job losses for many individuals, especially those in the manufacturing, transportation, and retail industries. For instance, self-driving cars powered by AI threaten the jobs of taxi and truck drivers. Similarly, automated customer service systems, chatbots, and virtual assistants replace human customer service representatives. Indeed, a study from the Brookings Institution suggests about 25% of U.S. jobs are at high risk of automation, underscoring the real-world implications of these technological advancements. (How Machines are Affecting People and Places) 

Another challenge presented by AI is the skills gap. As more jobs become automated, it is expected that the demand for highly skilled individuals in fields such as engineering, data analysis, and programming will increase. However, there is already a shortage of skilled workers in these areas, and the gap will likely widen. This means that individuals who need to gain the necessary skills or training in these areas may find it challenging to secure employment. In fact, the World Economic Forum predicts that by 2025, machines will perform more current work tasks than humans, emphasising the urgency of addressing the skills gap. (The Future of Jobs Report 2020) 

Furthermore, implementing AI in the workplace also presents challenges related to ethics and accountability. There are concerns that AI systems may be biased or discriminatory, especially if they are developed and trained by individuals with their own inherent biases. This could lead to unfair treatment of employees or customers, which could result in legal action against companies. This concern isn't unfounded. According to the European Commission's High-Level Expert Group on AI, careful attention must be paid to ensure AI systems aren't biased or discriminatory. (Ethics Guidelines for Trustworthy AI) 

While AI certainly has numerous benefits, significant economic and societal must be considered, and it is unlikely that AI will be limited in its use for the foreseeable future. 

IBM halts 7,800 job openings to explore AI roles

Recently, IBM announced that it would slow down or suspend hiring for back-office roles that could be replaced by artificial intelligence. The CEO of IBM, Arvind Krishna, revealed that around 30% of back-end roles, which equates to roughly 7,800 jobs, would be replaced by AI over the next five years, and the positions affected will primarily be non-customer-facing roles, such as those in human resources. According to a recent interview with Krishna, these roles make up roughly 26,000 of IBM's workforce. This transition to AI automation, which includes not filling roles vacated through attrition, could result in a potential loss of approximately 7,800 jobs over a five-year period. Krishna’s plan is one of the largest workforce strategies unveiled in response to rapidly advancing AI technology. (source: Bloomberg article) 

Krishna stated that while people currently employed in these roles would not be fired, any roles vacated by attrition would not be filled. Additionally, IBM will focus on revenue-generating roles and be selective when hiring for jobs that do not directly touch clients or technology.

IBM’s decision to halt hiring in areas where AI can replace human labour highlights the potential impact of AI-induced job cuts. As the capabilities of AI continue to expand exponentially, many experts have warned of the potential consequences to the labour market, with the tech, media, and legal industries among those most likely to be impacted. 

 In downtown San Francisco's SOMA district, the IBM headquarters can be found as of August 21, 2019, in California, USA. 

While AI has the potential to improve efficiency and productivity in the workplace, its implementation also raises ethical concerns, including the displacement of human labour. Krishna elaborates that more routine tasks like providing employment verification letters or transitioning employees between departments will likely be fully automated. However, some HR functions, like assessing workforce composition and productivity, may not be replaced over the next decade. Despite the job cuts, Krishna mentioned that IBM continues to hire for software development and customer-facing roles, adding about 7,000 people in the first quarter alone. (source: Bloomberg article) 

With proper planning and policies, AI can play a positive role in the workforce, especially in identifying skill gaps and supporting recruitment. As the impact of AI continues to evolve, it is crucial for organisations and policymakers to work together to ensure its benefits are realised while minimising the negative consequences.

What dangers does AI pose for the future of employment?

As the abilities of AI continue to advance, it won’t be long before machines take over critical areas of employment. While many believe that these areas will include writing and creative positions, there is a strong possibility that AI will reduce job opportunities for engineers. Tasks such as PCB routing, component selection, and even coding are slowly being replaced with AI thanks to technologies such as ChatGPT, and once these roles have been entirely taken over, only engineers with exceptional creativity that machines cannot replicate will have a future in engineering. Moreover, McKinsey suggests about half of the activities people are paid to do globally could theoretically be automated using currently demonstrated technologies, making this not just a hypothetical scenario. (Harnessing automation for a future that works) 

It is possible that future societies and governments shun AI in daily life, placing limits and restrictions on what they are allowed to do. IBM's leadership, however, foresees a different future. Krishna stated that he expects the US to potentially experience a 'shallow and short' recession towards the end of this year but believes IBM's strong software portfolio, including the acquired unit Red Hat, should help maintain steady growth despite worsening macroeconomic concerns. This perspective underscores the growing reliance on and confidence in AI and automation technologies within major tech companies. (source: Bloomberg article)

However, such an act would immediately provide an advantage to those not following such rules, thereby creating significant instability amongst countries and populations. Thus, it is more likely that AI will be left unrestricted, allowing engineers to create almost any AI application they can imagine. AI also has potential benefits. IBM, for instance, shows how AI can improve HR efficiency by identifying skill gaps and supporting recruitment. (Extending expertise: How cognitive computing is transforming HR and the employee experience)

Looking into the future, those seeking new jobs will likely find increased competition as the number of positions shrinks due to the integration of AI. Simply learning new skills will not be enough to guarantee a job, as not everyone can retrain or learn complex skills. Therefore, in the next few decades, government incentives and universal basic income schemes will need to be deployed that tax AI platforms to help provide for those no longer able to work.