AI as a Job Killer

Artificial intelligence (AI) is often referred to as the driver of the Fourth Industrial Revolution, and it is also transforming the world of work. According to a 2024 study by EY, 59% of respondents in Germany believe that the use of AI will lead to job losses. But are these concerns justified—or could AI even create new jobs? This article explores the relationship between AI and job losses, and provides an outlook on future developments.

There are already examples of job cuts in cases where tasks are being taken over by AI. For instance, the Swedish payment service provider reduced its workforce from 5,000 to 3,800 within 12 months due to the use of AI. The company’s AI assistant cut the average processing time for customer inquiries from eleven minutes to two minutes, leading to a reduced need for personnel. The freelance job market is also feeling the impact of AI. According to the German Institute for Economic Research (DIW), demand for automation-prone jobs fell by an average of 20% in the first eight months after the release of ChatGPT at the end of November 2022. Writing tasks such as ghostwriting and proofreading were most affected, with declines of around 30%. These developments are reflected in survey results. In a May 2024 Fiverr survey, managers and decision-makers cited new technologies as the main reason (44%) for job cuts in the previous six months. Furthermore, it is likely that AI is responsible for many more layoffs—especially in the tech industry—than companies have publicly acknowledged.

Transformation of the Working World

In some cases, employees are laid off due to AI, but not directly replaced by AI technologies. Instead, job cuts occur as companies reallocate capital to invest (heavily) in AI. For example, Meta CEO Mark Zuckerberg and Google CEO Sundar Pichai cited AI investments as the reason for layoffs at their companies. In many cases, however, job losses will be accompanied—though not necessarily simultaneously—by the creation of new roles. A good example is the software company SAP, which announced in July 2024 that it would cut 9,000 to 10,000 jobs worldwide as part of a restructuring program. The aim is to focus entirely on an ongoing AI initiative, and new positions specifically related to AI are to be created at the same time. As a result, the total number of employees was expected to remain stable by the end of 2024.

On the one hand, the increased use of AI creates new jobs, as these technologies need to be developed, operated, and maintained. In addition, companies require consulting on AI topics, which includes training employees. In a 2024 Bitkom study, 47% of all surveyed companies cited a lack of technical expertise, and 42% cited insufficient personnel resources as internal obstacles to the use of generative AI. Furthermore, 68% of companies that are using or planning to use generative AI believe that its deployment will create additional demand for skilled workers. On the other hand, AI technologies can automate tasks and thereby reduce the workload for skilled professionals—especially in routine activities. As a result, employees can use their freed-up time for other tasks, leading to increased overall productivity. This could help ease the shortage of skilled workers. A study published in 2023 found that most jobs and industries are only partially exposed to automation and will likely be complemented—rather than replaced—by AI. This conclusion assumes that AI’s expected capabilities will fully develop. For example, AI tools could simplify documentation tasks for nurses and doctors, giving them more time for patient care.

Reliable predictions about the impact of increasing AI use on the labor market are currently difficult to make. The future influence of AI on the world of work will depend on factors such as the speed and scope of AI development in terms of intelligence and autonomy, the cost-effectiveness of operating AI systems, and the evolution of legal frameworks. It is likely that many jobs will change to varying degrees, and that new professions will emerge.