Nobody Knows Exactly What AI Will Mean for Jobs, but Executive Consensus Shifts Toward Cuts

The Wall Street Journal yesterday published a provocatively headlined article that, unlike so much clickbait these days, lived up to its marquee billing.

Under bold, big-font text reading, “CEOs Start Saying the Quiet Part Out Loud: AI Will Wipe Out Jobs,” the Wall Street Journal’s Chip Cutter and Haley Zimmerman quoted and reported on the dire pronouncements of a passel of CEOs and other C-level executives at major U.S. corporations.

Before I go further, plunging into an exegesis of what the executives said about the degree to which AI will eviscerate corporate jobs, I will first spotlight a quote from somebody who does not hail from the technology industry. It was William Goldman, the late Oscar-winning screenwriter of screenplays for “All the President’s Men” and “Butch Cassidy and the Sundance Kid,” who once uttered the immortal words: “Nobody knows anything.”

What he meant, in an entertainment-industry context, is that nobody in the movie business possessed the foresight and prescience to truly know beforehand whether any given film would be a major commercial hit. From that premise, Goldman concluded that writers should strongly defend their ideas and scripts from critical onslaught. After all, if you, or anybody else (including the chief executives of entertainment conglomerates), can’t predict what will become a box-office sensation, why should you compromise your integrity and vision because somebody else claims to have foreknowledge they can’t possibly possess?

My point here, in this context, is that we can’t know exactly what’s coming. Despite the protestations of some to the contrary, nobody else knows what’s coming, either. Nonetheless, there are things we can control and there are things we can’t control. What you can control is your own response to external events. You can also control your own behavior, and you can safeguard your own integrity. It’s not a perfect state of affairs, but it’s something.

AI Stalks the Campus

Now let’s get back to the article in the Wall Street Journal. None of the executives quoted in that piece knows exactly how the future will unfold, but we can see that a consensus is documented. CEOs at major corporations are beginning to articulate the idea that AI will do more than contribute to the productivity of their employees; they now see AI as supplanting employees significantly, though estimates on staff reductions vary.

Here’s an excerpt from the article:

“Artificial intelligence is going to replace literally half of all white-collar workers in the U.S.,” Ford Motor Chief Executive Jim Farley said in an interview last week with author Walter Isaacson at the Aspen Ideas Festival. “AI will leave a lot of white-collar people behind.”
At JPMorgan Chase, Marianne Lake, CEO of the bank’s massive consumer and community business, told investors in May that she could see its operations head count falling by 10% in the coming years as the company uses new AI tools. 

That’s what is commonly known as a pull-quote, especially the first part from Ford’s Jim Farley.

The article’s authors then cite other executives, including recent job-cut warnings from executives at Amazon, Anthropic, and others. Amazon CEO Any Jassy, for example, recently wrote a note to the company’s employees saying that he expected the company’s overall corporate workforce to be smaller in coming years, attributing the leaner future to the magic elixir of AI, an Ozempic for corporate downsizing.

Said Jassy: “We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs.” He did not specify what those “other jobs” might be or what they might entail. That’s another thing nobody can know or predict with any precision, much to the consternation of those at risk of displacement.

No Sugar, No Lipstick.

Meanwhile, Anthropic CEO Dario Amodei, no stranger to apocalyptic warnings of AI’s neutron bomb-like obliteration of payrolls, told Axios in May that about half of all entry-level jobs could disappear in one to five years, resulting in U.S. unemployment of 10% to 20%. Amodei advised company executives and government officials to stop “sugarcoating” the situation. Let’s give him credit for doing his part, since he presented the pig without lipstick, the stinking turd without sweeteners or icing.

In the Wall Street Journal, these pronouncements, with particular emphasis on the foreboding commentary of Ford CEO Jim Farley, were portrayed as indicating a shift in how executives are articulating the prospective human cost of AI technology. Whereas executives previously equivocated and prevaricated, talking blithely and vaguely of new jobs sprouting in place of those that would be extirpated, they now are explicitly acknowledging that a growing number of white-collar jobs could be displaced by AI. (For the record, I don’t like the term “white-collar,” which carries the mustiness of a museum exhibit, redolent of the dying days of the industrial era; unfortunately, that’s the terminology that the WSJ used in the article.)

Public utterances are often different from private musings. The Wall Street Journal suggests that some CEOs have long believed, contrary to their public statements, that AI-enabled automation would result in efficiency and productivity gains that would translate into diminished payrolls. The article alludes to CEOs musing that their companies could operate effectively with a fraction of current staff members.

Shopify CEO Tobi Lütke is attempting to transform those musings into reality, decreeing that new employees wouldn’t be brought aboard unless managers could prove that the jobs in question couldn’t be performed by AI. It’s clear from the words and actions of Lütke that Shopify is barreling down the AI tunnel. We don’t yet know whether the excursion will end in daylight or darkness, for the company as a commercial enterprise or for its employees.

There’s a lot of AI experimentation happening in the workplace, including use of the technology to raise productivity to the point that previously discrete roles, such as product management and software engineering, might be consolidated. If such moves not only lower costs but result in equal or better qualitative and quantitative outcomes, especially from a beancounter’s perspective, we’ll see such practices widely emulated.

From the article:

“I think it’s (AI) going to destroy way more jobs than the average person thinks,” James Reinhart, CEO of the online resale site ThredUp, said at an investor conference in June.
Corporate advisers say executives’ views on AI are changing almost weekly as leaders gain a better sense of what the technology can do—and as they watch their peers more aggressively change hiring plans or flatten corporate structures. 

Words of Telco Wisdom

Of course, there are dissenters because there always are dissenters. I have never known an issue or a period in history where there wasn’t dissent. It’s natural, like day and night, action and reaction, sun and rain, et cetera. In the Wall Street Journal article, among the dissenters cited, we find Brad LIghtcap, COO of OpenAI, who said recently: “We have yet to see any evidence that people are kind of wholesale replacing entry-level jobs.” Still, even he believes job displacement will occur, analogous to how labor markets have been reconfigured by previous waves of technological disruption.

Recalling the timeless observation of aforementioned screenwriter William Goldman, I thought the words in the article that rang most true were uttered by Pascal Desroches, chief financial officer at AT&T. And there’s a certain irony in that, if only because he’s an executive at an old-school telecommunications company passing judgment on AI. When you think telco, you don’t think AI, and when you think AI, you don’t think telco. But sometimes, out of the moths of babes and telco executives, you find a kind of truth. Said Desroches, mulling the impact of AI on jobs: “We just don’t know.”

And we don’t know. We’ll know when the future becomes the present, and, we’ll know even more conclusively when the future recedes into the past. When that happens, we will gain the benefit of retrospection, which is even better than introspection. That’s when we’ll have the knowledge of hindsight, a 20/20 proposition.

Nevertheless, I always believe that it’s wise counsel to hope for the best and prepare for the worst. We should start thinking about what sort of governance and public policy might be required for societies in which unemployment rates are significantly higher — how much higher, we simply cannot know — than they are today.