Generative AI may reduce employee headcount by at least five percent in 2024, some CEOs say
Many CEOs see the potential for AI-led job losses in 2024, a PwC study showed. A quarter of those surveyed expect to reduce headcount by at least 5%.
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- Some CEOs expect at least a five percent reduction in employees in 2024 thanks to AI, PwC found.
- Leaders in media, banking, and insurance are most likely to expect AI job replacement, study shows.
- Workers should learn how to use AI on the job to reduce company costs, PwC's AI lead told BI.
CEOs seem to be warming up to using generative AI in their businesses to save time and make money this year — though at the cost of their employees, a recent survey suggests.
In PwC's 27th annual CEO report, the consulting giant surveyed 4,702 CEOs who lead companies big and small across a range of industries in 105 countries to understand how they plan on reinventing their businesses in the near future.
When it comes to generative AI, many CEOs said they see adopting the technology as an opportunity to increase revenues and boost efficiency. But these so-called AI productivity gains may also be what puts their employees out of work this year.
"Some of those efficiency benefits appear likely to come via employee headcount reduction — at least in the short term — with one-quarter of CEOs expecting to reduce headcount by at least 5% in 2024 due to generative AI," PwC said.
The survey suggests that AI may impact companies in certain industries more than others. Out of the CEOs who expect the technology to create a leaner workforce, 32% of them were found to work in media and entertainment, followed by banking and capital markets, insurance, and transportation and logistics.
That may be partly because tools like OpenAI's ChatGPT may be able to perform specific job tasks related to content creation, customer service, and insurance claims processing, Bret Greenstein, PwC's generative AI leader in the US, said.
AI may also eliminate the need for companies to hire more workers.
"It's hard to hire, it's hard to retain, it's expensive to train, and it takes months for people to become productive," Greenstein told Business Insider."If you can augment that workforce with AI, you can scale faster when you need to."
The PwC study on CEOs joins a growing body of research pointing to AI's disruptive nature in the workplace. A recent study by The Conference Board found that 50% of the global CEOs surveyed believe it could lead to job replacement. Last March, Goldman Sachs said AI could disrupt more than 300 million jobs.
In fact, Kristalina Georgieva, the managing director of the IMF, predicted earlier this month that AI will impact roughly 40% of jobs worldwide — especially high-skilled jobs in advanced economies.
"Ultimately, CEOs must embrace this as a new facet of their role: understanding, explaining, and managing the inevitable tensions between short-term job losses and long-term job creation potential from AI," the PwC survey said.
Still, Greenstein doesn't necessarily think using AI in the workforce will lead to layoffs. Instead, AI will help workers "dramatically reduce" their workload and free up time on higher-impact tasks.
Learning new AI skills, he told BI, may be what keeps workers at their jobs.
"If you can reimagine how workflow happens, you can you can drive savings and then shift people and resources and skills into higher value work,' Greenstein said.