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How and When Might the Great AI Job Replacement Take Place?

While there are isolated examples of wholesale layoffs among a few individual companies, the broad scale loss of jobs has not yet materialized. 

So far, the impact of Generative AI (GenAI) on the general workforce has been to enhance productivity rather than to reduce the overall number of jobs. Of course, we are barely into the beginning of the fourth industrial revolution.

In April of 2023, Goldman Sachs economists analyzed the potential impact of GenAI on the workforce:

Shifts in workflows triggered by these advances could expose the equivalent of 300 million full-time jobs to automation, Briggs and Kodnani write. Analyzing databases detailing the task content of over 900 occupations, our economists estimate that roughly two-thirds of U.S. occupations are exposed to some degree of automation by AI. They further estimate that, of those occupations that are exposed, roughly a quarter to as much as half of their workload could be replaced. But not all that automated work will translate into layoffs, the report says.

The Economist reported last June that “AI is not yet killing jobs.”  However, that doesn’t mean that significant job reductions may not be on the way:

In a recent paper Tyna Eloundou of OpenAI and colleagues say that ‘around 80% of the US workforce could have at least 10% of their work tasks affected by the introduction of LLMs’. Another paper suggests that legal services, accountancy and travel agencies will face unprecedented upheaval.

Using American data on employment by occupation, we single out white-collar workers. These include people working in everything from back-office support and financial operations to copy-writers. White-collar roles are thought to be especially vulnerable to generative ai, which is becoming ever better at logical reasoning and creativity. However, there is as yet little evidence of an ai hit to employment. In the spring of 2020 white-collar jobs rose as a share of the total, as many people in service occupations lost their job at the start of the covid-19 pandemic. The white-collar share is lower today, as leisure and hospitality have recovered. Yet in the past year the share of employment in professions supposedly at risk from generative ai has risen by half a percentage point.

The AIGrid podcast recently discussed why we have not seen major effects to this point, and what is restraining the implementation of GenAI bots and agents. Largely, government regulations generally do not include affordances for AI, rather the regulations are slow to revise and currently are human-centric. The purchase and installation of the enormous computing support for AI will take time. The infrastructure expenditures will be cost-effective, but only after time. The rollout of large-scale, broadly useful AI agent software is just about to begin. We can expect to see agent models become far more prevalent in the second half of this year and 2025. However, the sociological aspects of such changes are not to be minimized. Humans in many cases may prefer to work with and support other humans. Other market changes will need to take place in order to most efficiently employ AI agents, for example AI agents are less likely to be persuaded by Web marketing than are humans. In sum, while in some career paths and job classifications AI will be implemented very soon, in most areas, the current infrastructure and entrenched practices will take months and years to change in order to take full economic advantage of GenAI.

Yet leaders remain convinced that massive changes are on the way.  Kristalina Georgieva, the Managing director of the International Monetary Fund, says that “AI will hit the labor market like a tsunami, we have very little time to get people ready for it.” Speaking in Zurich Georgieva said “It could bring tremendous increase in productivity if we manage it well, but it can also lead to more misinformation and, of course, more inequality in our society,”

A wide-ranging poll of 2,000 executives earlier this year, conducted by staffing firm Adecco Group in collaboration with research firm Oxford Economics, showed that 41% of them expect to employ fewer people because of the technology. Anna Cooban of CNN reports:

The survey’s results provide another indication of the potential for AI and generative AI — which can create original text, images and other content in response to prompts from users — to revolutionize employment and the way people work. AI is emerging ‘as a great disruptor in the world of work,’ Denis Machuel, chief executive of Adecco Group, said in a statement. ‘Companies must do more to re-skill and redeploy teams to make the most of this technological leap and avoid unnecessary upheaval.’

Mary Daly, the CEO of the Federal Reserve Bank of San Francisco is quoted in an April issue of Wired, taking a more measured approach with the impacts and opportunities:

Technology has never reduced net employment over time for the country. If you look at technology over multiple centuries, what you see is that the impact lands somewhere in the middle, not necessarily dead-set in the middle, but somewhere in there, and where we end up depends a lot on how we engage with the technology. When I think of generative AI—or AI writ large—what I see is an opportunity. You can replace people, you can augment people, and you can create new opportunities for people. But you do have winners and losers. I came of age as an economist in the computerization era. That computer surge and the productivity that came with it clearly produced inequalities. AI in general, but especially generative AI, is an opportunity to assist those middle-skilled people in being more productive. But that’s our choice, and that requires a lot of thinking on our part.

The rollout of the largest number of AI replacements for employees will come with the robust development of AI agents that are developed with an inventory of the skills and specific task abilities that need to be addressed in a given position. For example, NVIDIA is developing AI-powered intelligent healthcare agents. These agents are being designed to cover many of the specific duties that are currently handled by human nurses. Such agents are under development at many companies for a vast array of jobs. Ken Yeung writes in Venture Beat that Microsoft says it will migrate the Khan Academy’s Khanmigo AI tutor bot to its Azure OpenAI Service, enabling them to provide all U.S. K-12 teachers free use of Khanmigo.

Agents are under development and testing around the world.  We can anticipate a steady stream of releases through the end of 2024 and into 2025. It will be important to monitor news of such releases that may be relevant to your job. The “tsunami” is still ahead of us. Recognizing that an average of one college or university is closing each week, we may see the implementation of agent-faculty and other academic professionals in order to reduce operating costs to stave off closures. Meanwhile, perhaps readers might use a real-time AI-powered search engine to monitor progress on the development of agents that can augment or replace their own positions.

This article was originally published in Inside Higher Ed’s Transforming Teaching & Learning blog. 

A man (Ray Schroeder) is dressed in a suit with a blue tie and wearing glasses.

Ray Schroeder is Professor Emeritus, Associate Vice Chancellor for Online Learning at the University of Illinois Springfield (UIS) and Senior Fellow at UPCEA. Each year, Ray publishes and presents nationally on emerging topics in online and technology-enhanced learning. Ray’s social media publications daily reach more than 12,000 professionals. He is the inaugural recipient of the A. Frank Mayadas Online Leadership Award, recipient of the University of Illinois Distinguished Service Award, the United States Distance Learning Association Hall of Fame Award, and the American Journal of Distance Education/University of Wisconsin Wedemeyer Excellence in Distance Education Award 2016.

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