1 in 4 CEOs Will Lay Off Staff Due to AI Advancement

According to a recent PricewaterhouseCoopers (PwC) survey, about one-fourth of global CEOs are considering reducing their workforce by at least 5% due to the implementation of generative artificial intelligence (AI).

This survey, published on January 15, gathered responses from over 4,700 CEOs across 105 countries.

More than half of these CEOs are at the helm of organizations with annual revenues exceeding $100 million.

Approximately one-third of the respondents revealed that their companies have already incorporated generative AI into their operations.

A notable 25% of CEOs are contemplating laying off at least 5% of their workforce as a result of this technology.

However, PwC's report also indicates that while some companies are reducing their workforce for efficiency in certain areas, they may be compensating by hiring in other departments.

The report states, “Although 14% of technology CEOs anticipate reducing headcount in the next year due to generative AI, 56% also anticipate hiring in 2024.”

The survey found that sectors like media, entertainment, banking, capital markets, and insurance are more inclined to cut staff due to generative AI.

On the other hand, industries such as engineering, construction, technology, metals, and mining are less likely to face AI-induced layoffs.

Around 70% of the CEOs expect AI to alter their business models within the next three years, necessitating new skills for their employees.

These findings were released closely following an analysis by International Monetary Fund (IMF) managing director Kristalina Georgieva, which revealed that 40% of all jobs are vulnerable to AI.

Georgieva warned that AI could intensify inequality, explaining that while half of the AI-impacted jobs might benefit from increased productivity and higher wages, the other half could see a decline in labor demand, lower wages, or even job elimination.

Georgieva highlighted that many emerging markets and low-income countries lack the necessary infrastructure and skilled workforce to leverage AI's benefits, potentially exacerbating global inequality.

She stressed the importance of creating social safety nets and offering programs for workers threatened by AI.

The influence of AI technology is expected to be a key discussion point at the World Economic Forum in Davos, attended by leaders from the tech industry and global political figures.

Sources:

https://cointelegraph.com/news/25-percent-global-ceo-to-cut-staff-generative-ai-pwc-survey

https://www.pwc.com/gx/en/ceo-survey/2024/download/27th-ceo-survey.pdf