IBM CEO predicts 30% of his staff will be replaced by AI in the next five years

The computing giant has paused hiring as it estimates that almost a third of ‘non-customer-facing’ roles will be obsolete due to rapid AI advancements.

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Technology giant IBM will stop hiring for roles it believes artificial intelligence (AI) is capable of replacing, signalling a major step change in the use of ‘smart computers’ in today’s workforce.

In an interview with Bloomberg, published on Monday, CEO Arvind Krishna estimated that up to 30% of non-customer-facing roles – roughly 7,800 jobs – could be automated in the near future. Krishna named human resource (HR) roles amongst the first to be robotised.

Machine learning platforms such as ChatGPT, have quickly been utilised across industries as companies apply the technology to basic tasks, such as AI marketing. For many, automated tools have also been a hiring life ring during the current recruitment crisis.

IBM’s strategy, however, is one of the boldest moves yet. There could also be downsides, with some analysts expressing fears about the potential for AI to disrupt the labour market.

Back office roles most likely to be replaced by AI

Speaking to Bloomberg, Krishna specified that IBM plans to pause hiring for roles which are ‘non-customer-facing’ – specifically, those in human resources.

Among the tasks he said could be fully automated were providing employment verification letters, or moving employees between departments. Such fiddly admin duties can require manual time, but remain ripe for automation.

Somewhat surprisingly, given they are commonly crowned ‘most likely to be replaced by AI’, customer assistants will remain protected at IBM. Krishna confirmed that customer-facing roles, such as software developers and sales teams, will not be impacted by the change.

IBM’s senior leadership remains conscious of customer preferences for human interaction over machines. Last December, Userlike found that 60% of customers would rather wait in a queue for a service agent than speak to a virtual AI assistant.

Recession worries accelerate AI adoption

Leaps forward in AI advancement have coincided with mass cullings across the global tech landscape. From January to March 2023, US employers announced a combined 270,416 layoffs due to economic troubles, causing chaos in the labour market.

The technology sector accounted for over a third of these cuts (102,391) and IBM was part of the wave. In January, it cut 3,900 roles after missing its annual cash target.

With the tech giant now appearing to undergo a significant structural shift, it’s clear that the move to AI is about long-term budget reduction as much as headcount – a staff fall-off, as opposed to short-term layoffs.

As further proof, tech brand Dropbox last week made 500 staff members redundant. In a statement, it said the move had a dual purpose: to save money and build out the company’s AI division.

According to a recent Goldman Sachs report, 300 million jobs across Europe and the US face being replaced by smart computers if the current rate of AI expansion continues.

However, the report stresses that worker displacement from automation will likely generate new jobs, leading to employment growth in the long-term.

See our list of the Most Innovative UK AI Startups to Watch

Written by:
Helena Young
Helena is Lead Writer at Startups. As resident people and premises expert, she's an authority on topics such as business energy, office and coworking spaces, and project management software. With a background in PR and marketing, Helena also manages the Startups 100 Index and is passionate about giving early-stage startups a platform to boost their brands. From interviewing Wetherspoon's boss Tim Martin to spotting data-led working from home trends, her insight has been featured by major trade publications including the ICAEW, and news outlets like the BBC, ITV News, Daily Express, and HuffPost UK.

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