Post ContentThe rapid spread of AI in the workplace could significantly disrupt entry-level jobs. (Image: FreePik)
Artificial intelligence (AI) is rapidly being adopted by enterprises, adding to the woes of thousands of professionals worldwide. Amid the ongoing wave of layoffs, Bill McDermott, CEO of ServiceNow, has issued a stark warning. McDermott said rapid AI adoption by companies to boost productivity could create significant challenges for entry-level workers.
Talking to CNBC, the executive shared that unemployment for new graduates could easily go into the mid-30s in the next couple of years. He added that a significant portion of the work will be managed by AI agents, and hence it is going to be challenging for young graduates to distinguish themselves in the corporate environment.
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The ServiceNow boss told the broadcaster that tools made by his company will help businesses cut hiring costs. He shared that the software company has already taken over 90 per cent of the use cases that were once dependent on humans in customer service.
His comments come at a time when industries and businesses are increasingly cutting costs and jobs by deploying new AI tools. Social media giant Meta is considering sweeping layoffs that could impact 20 per cent of its workforce as it seeks to offset investments in expensive AI infrastructure and improve efficiency with AI-assisted workers.
In February, Jack Dorsey’s Block announced it was laying off about 50 per cent of its workforce as AI automates more tasks. Meanwhile, software company Atlassian said it would lay off about 10 per cent of its workforce to support its investments in AI.
The AI pivot
In the first two months of the year, the tech world witnessed layoffs of over 40,000 employees. These layoffs majorly took place in sectors like logistics, manufacturing, fintech, etc. A major reason has been that companies are no longer cutting costs; rather, they are reallocating investments from human payroll to AI infrastructure. Names like Meta and Oracle have already announced major layoffs owing to their massive spending on AI data centres and hardware.
Also Read | Atlassian lays off 1600 employees in AI push
Moreover, companies are increasingly fostering AI-assisted efficiency. This is evident from Block CEO Jack Dorsey’s comments, where he stated that their 4,000-person layoff was driven by the ability of AI tools to manage a wider range of tasks, making the company leaner and more efficient. Besides, with AI agents taking over customer service and routine coding, many companies such as Salesforce and Klarna have reduced their staff in these departments.
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