Corporate America has hailed artificial intelligence as the beginning of a new era of productivity, but Goldman Sachs’ most recent research implies job layoffs are already on the horizon.
Goldman’s study is based on a survey of 105 Goldman bankers who serve clients from a variety of businesses. It provides a behind-the-scenes look at how large US corporations are implementing AI and what this implies for their workforce.
According to the poll, organizations are mostly turning to AI to increase efficiency and revenue, rather than to reduce expenses, with nearly half of banking clients utilizing the technology to promote growth. In comparison, just one in every five uses it largely to minimize costs.
However, just around 10% of businesses have cut staff as a result of AI thus far, despite the fact that about one-third of bankers who serve customers in the media, telecom, and technology sectors indicate early symptoms of employment pressure.
However, the bankers anticipate that AI will soon begin reducing payroll. Over the following year, they predict a 4% drop in headcount, which will be followed by a more significant 11% cut in three years.
In a Thursday note, Goldman’s analysts, lead by chief economist Jan Hatzius, said that the comparatively rapid rise in anticipated adoption and head count reductions over the next three years indicates that AI implications on the US labor market might occur sooner than anticipated.
Customer support is most at risk
As AI changes positions, over 55% of Goldman’s bankers expect clients to rely on hiring freezes or natural attrition, while 26% predict layoffs or more extensive restructuring.
Additionally, Goldman’s bankers see the most potential for AI-driven staff reductions in customer service, where 80% of respondents anticipate layoffs as automation gains traction. Positions in operations (49%), IT, engineering, and administrative support are also at risk.
Goldman’s research is released in the midst of a recent wave of layoffs that highlight how rapidly labor cutbacks are extending beyond conventional cost-cutting initiatives.
The CEO of digital giant Amazon, Andy Jassy, stated that cultural fit, not cost savings or artificial intelligence, was the reason behind the 14,000 job cutbacks earlier this week.
However, the timing demonstrates how technology is changing employment practices across industries.
They said, “Our long-standing belief that AI is set to have a transformative impact on the labor market and economy is supported by the relatively high current and expected adoption rates for US corporates and significant expected head count reductions.”
“Too early in terms of technology”
The quick adoption of AI by businesses is reflected in Goldman’s job loss projection.
According to Goldman’s bankers, 37% of clients now use AI for routine production, which is far higher than the 9.9% adoption rate seen in a recent Census Bureau poll.
They predict that overall use will increase to 50% next year and 74% in three years, indicating a sharp acceleration as AI technologies become increasingly integrated into daily operations.
However, many businesses are still wary. Approximately 61% of Goldman’s bankers stated that customers think AI is “too early a technology” to be extensively used, and 47% claimed they don’t have the internal knowledge to develop the necessary tools.
