Latest news with #EmilieVestergaard
Time of India
20-05-2025
- Business
- Time of India
AI is not increasing productivity or leading to job losses, finds a study
A new study by the National Bureau of Economic Research in Denmark has found that the use of Artificial Intelligence (AI) in workplaces has had a very limited impact on employee pay and work hours. The report, based on data from 25,000 workers across 7,000 offices, shows that while AI is being adopted quickly, it is not transforming productivity or leading to job losses. Study looked at jobs most exposed to AI The research focused on roles that many believe are most at risk from AI—accountants, customer support specialists, financial advisors, HR professionals, software developers, and teachers. These professions are often seen as likely to be changed or replaced by new AI tools. No big change in pay or hours worked Economists Anders Humlum and Emilie Vestergaard, who authored the paper, said, "AI chatbots have had no significant impact on earnings or recorded hours in any occupation." On average, workers saved three percent of their time due to AI. But only three to seven percent of these productivity gains resulted in higher pay for them. No sign of major disruption The study found no evidence of people losing their jobs or of any large rise in productivity due to AI. The authors wrote, "While adoption has been rapid, with firms now heavily invested in unlocking the technological potential, the economic impacts remain small." They added, "Modest productivity gains (average time savings of 3 per cent), combined with weak wage pass-through, help explain these limited labour market effects. Our findings challenge narratives of imminent labor market transformation due to Generative AI." Some firms still cutting staff for AI Despite these findings, some companies continue to replace workers with AI. Cybersecurity firm CrowdStrike, which was in the news last year for a global IT outage, recently said it would cut five percent of its workforce and use AI instead. Language learning platform Duolingo also announced that it would "gradually stop using contractors to do work that AI can handle." The company said it had made a similar move in 2012 when it shifted its focus to mobile technology. Live Events Company rehires humans after AI fails to meet expectations Swedish fintech company Klarna is preparing to bring back more human workers after depending heavily on artificial intelligence (AI) for customer service tasks. The company had earlier reduced its workforce and automated several functions using AI tools but now says the results were not as expected. Klarna executives admitted that AI customer agents could not match the quality of service delivered by humans. Automation led to performance drop Over the last two years, Klarna worked closely with OpenAI to cut jobs and automate operations. By 2023, it had paused hiring and used AI to handle most customer service functions. This move helped the company save money, including $10 million on marketing. AI systems were used for tasks like translation, content creation, and data analysis. However, Klarna's CEO Sebastian Siemiatkowski later said, 'Cost unfortunately seems to have been a too predominant evaluation factor when organising this, what you end up having is lower quality.' Staff strength saw a major drop According to Klarna's IPO filing in March, the total number of full-time employees dropped from 5,527 in December 2022 to 3,422 by the end of 2024. The company said AI was doing the work of around 700 customer service agents. Even in late 2024, Siemiatkowski had said, 'AI can already do all the jobs that we, as humans do.' But the company's recent shift suggests otherwise. Other firms cutting jobs for AI too Klarna's move is part of a wider trend in the tech and finance sectors. CrowdStrike, a cybersecurity company, recently said it would cut five percent of its staff and shift some roles to AI. Similarly, Duolingo announced plans to reduce the use of contractors for tasks AI can handle. The language-learning app said it would automate more internal processes and limit new hiring to teams that cannot automate further. Microsoft cuts 6,000 jobs amid AI expansion Microsoft has also joined this trend. The company laid off about 6,000 workers, or nearly 3% of its global workforce, as it pushes further into AI. Among those let go was Gabriela de Queiroz, Director of AI for Microsoft for Startups. 'I was impacted by Microsoft's latest round of layoffs. Am I sad? Absolutely,' she wrote on social media. According to Bloomberg, over 40% of the roles cut in Washington state were in software engineering. The company said it was reorganising to simplify management. Despite losing her job, de Queiroz said she stayed a bit longer to finish meetings and say goodbye, writing, 'That felt right to me.' Economic Times WhatsApp channel )
Yahoo
19-05-2025
- Business
- Yahoo
Study looking at AI chatbots in 7,000 workplaces finds ‘no significant impact on earnings or recorded hours in any occupation'
AI chatbots have been rolled out across hundreds of white-collar workplaces, but on average, their effect on hours and pay has been negligible, according to a National Bureau of Economic Research working paper linking AI use to corporate records in Denmark. On average, employees saved 3% of their time, while just 3%-7% of their productivity gains came back to them in the form of higher pay. Since OpenAI rolled out ChatGPT just over two years ago, AI chatbots have become the fastest-adopted technologies in history, rivaling the PC three decades ago. Their popularity has created and destroyed entire job descriptions and sent company valuations into the stratosphere—then back down to earth. And yet, one of the first studies to look at AI use in conjunction with employment data finds the technology's effect on time and money to be negligible. 'AI chatbots have had no significant impact on earnings or recorded hours in any occupation,' economists Anders Humlum and Emilie Vestergaard wrote in a National Bureau of Economic Research working paper released this week. Humlum, an assistant professor of economics at the University of Chicago's Booth School of Business, and Emilie Vestergaard, an economics PhD student at the University of Copenhagen, looked at 25,000 workers across 7,000 workspaces, focusing on occupations believed to be susceptible to disruption by AI: accountants, customer support specialists, financial advisors, HR professionals, IT support specialists, journalists, legal professionals, marketing professionals, office clerks, software developers, and teachers. They pulled records from Denmark, a country whose rates of AI adoption as well as hiring and firing practices are similar to those in the U.S. but where record-keeping is far more detailed, allowing the study to anonymously match survey responses to records of actual hours and pay. On average, users of AI at work had a time savings of 3%, the researchers found. Some saved more time, but didn't see better pay, with just 3%-7% of productivity gains being passed on to paychecks. In other words, while they found no mass displacement of human workers, neither did they see transformed productivity or hefty raises for AI-wielding superworkers. 'While adoption has been rapid, with firms now heavily invested in unlocking the technological potential, the economic impacts remain small,' the authors write. Productivity, interrupted The findings might be a surprise against the backdrop of aggressive corporate adoption of AI: from Duolingo replacing its contract workers with AI to Shopify decreeing it will only hire humans as a second choice to AI. Meanwhile, investors have been bidding up shares of companies involved in AI. But the NBER paper doesn't mean that earlier findings of AI's productivity boost have been wrong, said Humlum—just incomplete. Most of the earlier research has focused 'exactly on the occupations where the time savings are largest,' Humlum told Fortune. 'Software, writing code, writing marketing tasks, writing job posts for HR professionals—these are the tasks the AI can speed up. But in a broader occupational survey, where AI can still be helpful, we see much smaller savings,' he said. Other factors that explain AI's overall ho-hum impact include employer buy-in and employees' own time management. 'I might save time drafting an email using a large language model, so I save some time there, but the important question is, what do I use that time savings for?' he said. 'Is the marginal task I'm shifting my work toward a productive task?' Workers in the study allocated more than 80% of their saved time to other work tasks (less than 10% said they took more breaks or leisure time), including new tasks created by the use of AI, such as editing AI-generated copy, or, in Humlum's own case, adjusting exams to make sure that students aren't using AI to cheat. There's also the fact that real workplaces are much messier than structured experiments. 'In the real world, many workers are using these tools without even the endorsement of the boss. Some don't even know if they're allowed to use it; some are allowed but not really encouraged to use it,' Humlum said. 'In a workplace where it's not explicitly encouraged, there's limited space to go to your boss and say, 'I'd like to take on more work because AI has made me more productive,'' let alone negotiate for higher pay based on higher productivity. And of course, employees might not want to advertise how much more productive AI has made them, especially considering the well-trod adage that the reward for efficient workers is more work. Some of the findings around hours and pay in workplaces where AI isn't used 'suggest that workers are not exactly knocking on the boss's door asking for more work,' Humlum said. Great expectations, mid results The NBER paper comes on the heels of other indications suggesting that AI's potential, while tremendous, has been vastly overstated in the media and the market. Payment processor Klarna, which made waves last year when it revealed it stopped hiring humans in favor of a super-productive AI, recently tempered its rhetoric. An IBM survey of 2,000 CEOs revealed that just 25% of AI projects deliver on their promised return on investment. The main driver of adoption, it seems, is corporate FOMO, with nearly two-thirds of CEOs agreeing that 'the risk of falling behind drives them to invest in some technologies before they have a clear understanding of the value they bring to the organization,' according to the study. Nobel laureate Daron Acemoglu, who has extensively researched automation and labor, estimates AI's productivity boost at approximately 1.1% to 1.6% of GDP in the next decade—a sizable boost for an advanced economy like the U.S., but far from the doubling of GDP some technologists have predicted. The danger with AI is that 'the hype will likely go on for a while and do much more damage in the process than experts are anticipating,' he wrote for Fortune last year. In fact, 'getting productivity gains from any technology requires organizational adjustment, a range of complementary investments, and improvements in worker skills, via training and on-the-job learning,' he said. That's a finding backed up by Humlum and Vestegaard, whose paper showed greater productivity gains when employers encouraged AI use and trained workers in it. It could also be just a matter of time. After all, the Industrial Revolution went on for a century, transforming how people lived and worked long after the invention of the steam engine. 'It took a couple decades to see that we can have an assembly line powered by electricity instead of having everything run centrally via a steam engine,' Humlum said. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
NDTV
19-05-2025
- Business
- NDTV
Has AI Been Overhyped? Study Shows Minimal Impact On Jobs And Pay
Artificial intelligence (AI) has been the buzzword for companies globally for the last two years. The popularity of AI models has left human workers concerned about their careers as employers attempt to use the technology to cut costs, increase efficiency and maximise revenues. And yet, one of the first studies to analyse AI use in conjunction with employment data has returned some 'mild' results. A working paper released by the National Bureau of Economic Research, Denmark, found that AI's use had a negligible effect on hours and pay. On average, employees saved three per cent of their time, while just three to seven per cent of their productivity gains came back to them in the form of higher pay. "AI chatbots have had no significant impact on earnings or recorded hours in any occupation," economists Anders Humlum and Emilie Vestergaard wrote in the paper. For the study, 25,000 workers across 7,000 workspaces were analysed. The majority of the employees belonged to occupations (accountants, customer support specialists, financial advisors, HR professionals, software developers and teachers) believed to be susceptible to disruption by AI. After analysing the data, the researchers said they found no displacement of human workers, nor did they see "transformed productivity and hefty raises for AI-wielding superworkers". "While adoption has been rapid, with firms now heavily invested in unlocking the technological potential, the economic impacts remain small," the researchers said. "Modest productivity gains (average time savings of 3 per cent), combined with weak wage pass-through, help explain these limited labour market effects. Our findings challenge narratives of imminent labor market transformation due to Generative AI." The findings may shock the companies which are actively trying to reduce their headcount in favour of AI. CrowdStrike, the infamous cybersecurity company responsible for the massive global IT outage last year, announced this month that it was slashing five per cent of its workforce and replacing it with AI. Similarly, language-learning platform Duolingo announced it would "gradually stop using contractors to do work that AI can handle". The company justified its switch in approach, stating that it had taken a similar call in 2012 by betting big on mobile.
