IBM CEO says 30% of back office roles could disappear within five years
As we head towards the middle of 2023, the process of reckoning with the impact of AI on education, jobs and financial markets continues.
The most recent high-profile contributor to the debate is IBM CEO Arvind Krishna, who said during an interview with Bloomberg that he expects AI and automation to replace 30% of human occupied roles within the next five years.
The type of back office, non-customer facing roles such as HR and finance teams account for around 26,000 jobs at IBM, and Krishna said, "I could easily see 30% of that getting replaced by AI and automation over a five-year period." This equates to around 7,800 jobs disappearing over the next few years.
Krishna did go on to explain that rather than firing existing holders of these jobs, IBM would simply slow down hiring in these areas and simply not rehire for roles when people leave.
A spokesperson for IBM later tried to reframe Krishna's comments in a more positive light in an email to Business Insider.
"There is no blanket hiring 'pause' in place. IBM is being deliberate and thoughtful in our hiring with a focus on revenue-generating roles, and we're being very selective when filling jobs that don't directly touch our clients or technology. We are actively hiring for thousands of positions right now."
IBM is certainly far from alone in hollowing out back-office roles. Barely a day seems to pass without a tech giant announcing thousands of job cuts and a refocus on revenue generation and core competencies. But the role of AI in these job cuts varies, and most businesses are still coming to grips with how to deploy technology that is developing faster than anyone dreamed of even relatively recently.
The potential for AI to reshape existing business models was demonstrated again yesterday as the Chief Executive of California-based edtech company Chegg, admitted in a call with analysts that "a significant spike in student interest" in the essay generating capabilities of ChatGPT was beginning to have an impact on sales revenue.
Students being interested in a tool which generates essays for free should surprise very few people, but the warning spooked investors in other education platforms. Shares in Pearson dropped by 15% and lockdown language favourite Duolingo by 10%.
In a comment to the Financial Times, Pearson chief executive Andy Bird said that the Pearson business model was fundamentally different to that of Chegg, and that large language models could prove lucrative for Pearson in the longer term.
"The output of these generative AI models is largely predicted by the quality of the data sets that are inputted into them," Bird said. "We are the owners of some very rich, pure data sets — when you start to input them into generative AI models, you get better outputs."
Of course, the impact on education and jobs by generative AI could be the least of the problems created by the companies who have been throwing resources it. Recent comments by "Godfather of AI" Geoffrey Hinton starkly illustrate the risks of the race to develop more and more advanced AI.
"It takes away the drudge work. It might take away more than that."