AI is not the culprit for massive job cuts and layoffs across the tech industry and the job market as a whole. This is what IBM CEO Aravind Krishna believes since he has refuted the claims that the current wave of mass layoffs across the tech industry is primarily due to emergence of artificial intelligence (AI). This statement of his is contrary to what other experts have given for job cuts and layoffs.
Aravind Krishna cited that the job cuts in the tech industry are majorly due to the over-hiring during the pandemic years by companies. Although he acknowledges that there will be job losses due to the advancement in AI. However the current displacement is a result of the over hiring during the COVID years from 2020-2023.
What did Aravind Say exactly?
IBM CEO Aravind Krishna said this during the Verge interview. Where he used strong terminology to highlight the unprecedented staffing increases. This was not limited to big tech companies rather was a industry problem during the time.
He said “If you look at the total employment numbers, I think people gorged on employment… during the pandemic and the year after,” Krishna explained. He noted that some companies saw their employee count spike by “30, 40, 50, 100 percent” from 2020 to 2023.
He also added “There is going to be some natural correction. Business is never completely optimized. I think in engineering terms, it’s an underdamped system. When there’s a need, it goes above. Now, it has to correct. It’s probably going to go below what’s needed, and then it’ll hit the correct equilibrium, depending on market demand and growth,” the CEO noted.
Will AI-led job losses be catastrophic?
On talking about the Talking about the long-term impact of Al on employment, Krishna projected a significant but manageable level of job displacement over the next couple of years.
“Could there be up to 10 percent job displacement? I believe that’ll be likely over the next couple of years. It’s not 30 or 40 percent, but it is up to 10 percent of the total US employment pool. It is very concentrated in certain areas.” he said.
Aravind Krishna also believes that as Al increases overall productivity, companies will ultimately hire more people, though in different roles.
“Now, as you get more productive,companies are going to then hire more people but in different places. We are hiring more because people say, “I don’t need to do the entry-level task because an Al agent can do it.” I’m looking at them like, “Really?” Think strategically for a moment,” the CEO noted.
