1 in 4 CEOs expect to lay off workers this year due to AI – PwC study

A quarter of the world's CEOs plan to lay off at least 5% of their workforce through generative artificial intelligence (AI), according to a new survey by PricewaterhouseCoopers (PwC).

The survey, published on January 15, had responses from more than 4,700 CEOs from 105 countries, with more than half of the CEOs surveyed heading organizations with annual revenues of more than $100 million.

Just under a third say that once their company has implemented generative AI, 25% of CEOs expect to lay off at least 5% of their workforce because of the technology.

The PwC report added, however, that in some areas, companies cutting headcount for efficiency reasons “may already be making more people redundant.”

Although 14% of tech CEOs expect headcount to decrease due to generative AI in the next year, 56% anticipate hiring by 2024.

The media, entertainment, banking, capital markets, and insurance sectors are most likely to experience layoffs due to generative AI technology, while the engineering, construction, technology, metals, and mining industries are seen as least safe from AI-fueled layoffs.

Nearly 70% of CEOs say AI will change their business models within three years and expect their employees to develop new skills.

AI could affect 40% of all jobs and worsen inequality: IMF

The results of the survey were based on an analysis by Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), that 40% of all jobs are exposed to AI and that the technology could exacerbate inequality.

Georgieva says AI can exacerbate inequality, as half of the jobs exposed to AI will see productivity gains by integrating the technology, resulting in disproportionately higher wages.

Meanwhile, the other half could see AI taking over human jobs – reducing wages, labor demand and hiring.

Related: WEF Davos 2024: Focus on AI and clearer crypto regulations

“In extreme cases, some of these jobs may disappear,” Georgieva added.

“Many of them [emerging markets and low-income] Because countries lack the infrastructure or skilled workforce to take advantage of AI, there are concerns that the technology could eventually exacerbate disparities between countries.

She said it is critical for countries to create social safety nets and programs for workers at risk of AI.

The impact of technology is expected to be a big topic at the World Economic Forum in Davos, where Big Tech executives and world leaders will be attending.

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