IBM's CEO, Arvind Krishna, has revealed that the company plans to downsize its back-office workforce by nearly a third, with a potential reduction of 7,800 jobs over several years.
Krishna cited advances in artificial intelligence (AI) as the main reason for this, claiming that AI and automation could replace around 30% of the current non-customer-facing roles over a five-year period. However, the back-office employees are only a fraction of IBM's overall workforce of 260,000, and the company has continued to hire in certain roles, despite recently letting go of around 5,000 workers in other areas.
Krishna's comments come as a study by Goldman Sachs revealed that AI-powered automation could result in the loss of up to 300 million jobs. The report also highlighted that as much as one-quarter of current work tasks in the United States and Europe could be automated. While this technology has made it easier to execute less complex work, certain human resource tasks, data management and other repetitive operations, AI and automation still have their limitations.
The release of generative AI applications, like ChatGPT, has taken the world by storm, but the technology is still prone to mistakes and can only be trusted with simple tasks for now. This concern was echoed by Geoffrey Hinton, the godfather of AI, who recently left Google's industry-leading AI research team.
Hinton criticized Microsoft for moving too quickly in making ChatGPT-style technology available, saying that competition between tech giants was pushing companies to release new AI technologies at dangerous speeds, posing a threat to jobs and society.
IBM has stated that there is no blanket hiring pause, and the company is being selective when filling jobs that don't directly touch clients or technology.
Despite this, the downsising of its back-office workforce reflects the trend towards the increased use of AI and automation, which could result in further job losses across various sectors in the future.
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