Expert analysis explains why executive decisions to invest in AI by cutting staff are flawed.
Artificial intelligence has not replaced people: research reveals zero return on investment for technology-driven layoffs / © Credits
Artificial intelligence has not met the expectations placed upon it regarding the replacement of human employees with this technology.
This is reported by Futurism.com.
Many large technology corporations with well-known brands, such as Meta, have already laid off thousands of employees in favor of artificial intelligence. However, it has emerged that these layoffs are not leading to positive business outcomes.
A research and consulting firm surveyed 350 company executives worldwide, whose companies earn at least $1 billion annually, to determine if all these AI-driven layoffs are paying off in the real world.
The first conclusion is that this trend is real: a total of 80 percent of respondents admitted to workforce reductions to invest in artificial intelligence or autonomous technologies. But they state they had no idea if AI would bring any benefits—they simply believed in the promise of AI automation.
This is where it gets interesting. The survey revealed that executives who reduced staff to invest in AI achieved the same financial returns as those who retained their employees. In other words, the attempt to replace workers with artificial intelligence yields no discernible return for these companies.
What’s more, many of these companies specifically reduced their personnel to free up funds necessary for AI technologies, meaning they sacrificed valuable institutional knowledge and employee goodwill in vain.
These findings are not entirely unexpected. Research from last year indicated that AI does not provide significant revenue growth for the vast majority of companies implementing it.
However, not everyone believes that all AI investments are doomed to backfire. Gartner analyst Helen Poitevin suggested that these seemingly drastic executive actions might simply be attempts to test AI rather than structurally rebooting the entire company.
“It seems to us that this is a kind of one-off exercise for many in small volumes, but not what it means to get a full return on investment in AI,” Poitevin stated.
So, which companies are seeing increased profits from artificial intelligence?
Gartner’s survey indicated that companies using AI as a form of “staff augmentation”—meaning they provide their employees with AI tools to enhance efficiency, rather than fully replacing them—are reaping the greatest benefits.
However, even this strategy is fraught with risk: previous studies have shown that most employees are not yet interested in using AI, and one survey revealed that 54 percent avoid using their own AI tools altogether.
As a reminder, another study indicated that women are more likely than men to risk losing their jobs due to the impact of artificial intelligence.
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Source: tsn.ua