Online education company Chegg has found itself with the honour of being the first company to at least ‘publicly’ admit that Generative AI appears to have had an adverse impact on its business model. On its most recent earnings call on May 1st, Chegg’s CEO Dan Rosensweig said that “since March we saw a significant spike in student interest in ChatGPT” which they believed was having an impact on new customer growth rates. The result was a 48% drop in the share price on the day to levels where it has remained since.
Meanwhile IBM a company which is no stranger to developing AI technologies having pioneered Watson over a decade ago and being involved in AI powered technology that was the first to beat a reigning world Chess Champion - also weighed in on the impact of AI. In an interview with Bloomberg, IBM’s CEO Arvind Krishna suggested that they will slow and even suspend hiring in job functions that they believe could be done using today’s AI technologies.
This they believe would impact around 3% of its 260,000 strong workforce (roughly 8,000 positions) over the next five years. These roles are predominantly in back office, not customer facing positions such as human resources, and accounts.
There have been other high-profile examples of AI appearing to have a meaningful impact on jobs. After announcing that it was going to use AI to help generate material to enhance its content and quizzes in early 2023 just weeks after the media company, Buzzfeed announced a 10% reduction in its workforce. More recently the company admitted that it had used generative AI to write around 40 of the travel guides it had used online recently. It is safe to say this is just the tip of the iceberg with AI undeniably automating tasks in the service industry just like robotics has in the manufacturing industry.