In March 2023, Shopify's CEO announced a new rule requiring managers to prove that AI couldn’t perform a job before requesting additional headcount. Shortly thereafter, Duolingo’s CEO made a similar decision, planning to phase out contractors and replace them with AI. These announcements reflect a broader trend among employers who are hiring fewer people due to advancements in artificial intelligence. To understand the immediate impact of AI on the labor market, economist Zanele Munyikwa from Revelio Labs analyzed job descriptions and found a 19% decline in AI-doable tasks in online job postings over the past three years. This decrease is primarily attributed to companies hiring fewer people for roles that AI can perform. Further segmentation of occupations revealed a steeper decline in job openings for high-exposure roles (31%) compared to low-exposure roles (25%) since the release of ChatGPT in 2022. High-exposure roles include tech functions like database administration, IT specialization, information security, and data engineering, whereas low-exposure roles are in-person positions such as restaurant managers, foremen, and mechanics. Another study by researchers at Washington University and New York University in 2023 focused on freelancers in writing-related occupations. Following the introduction of ChatGPT, job listings in these fields dropped by 2% on Upwork, with monthly earnings falling by 5.2%. The researchers concluded that generative AI is reducing the demand for knowledge workers across the board, at least in the short term. However, the implications of these findings are still uncertain. Munyikwa emphasizes that while companies believe AI can handle many tasks, the technology may not yet be capable of delivering the same quality and creativity as human employees. For instance, Klarna, a fintech company, initially froze human hiring after investing in AI, claiming that an AI assistant was doing the work of 700 full-time agents. However, the company has since reversed this strategy, acknowledging that the AI-driven cost-cutting led to lower service quality. According to Klarna’s CEO, Sebastian Siemiatkowski, maintaining high-quality human support is crucial for customer satisfaction and the company’s future. Despite this setback, Siemiatkowski still plans to reduce his workforce by 500 through attrition in the coming year. He anticipates further downsizing once Klarna’s technology improves, which he expects to happen within 12 months. This attitude is common among tech CEOs, who often view AI as a means to minimize the overheads associated with human employees, such as complaints, demotivation, and the need for breaks. As AI tools continue to evolve and become more sophisticated, the trend toward reducing white-collar headcount is likely to persist. Industry insiders remain divided on the long-term effects of AI on employment. While some companies are experiencing the limitations of current AI and are readjusting their strategies, the overwhelming sentiment is that AI will continue to displace jobs. The rapid improvement of AI technologies adds to this uncertainty, with many predicting a significant shift in the job market within the next year. Tech companies are particularly enthusiastic about leveraging AI to cut costs and increase efficiency, even if it means shedding human employees. Revelio Labs is an analytics firm that aggregates large sets of workforce data to provide insights into labor market trends. The company’s data-driven approach helps employers and policymakers understand the immediate and potential long-term impacts of AI on various industries. Shopify and Duolingo, two companies leading the charge in AI integration, are known for their innovation and efficiency in the tech sector. Their decisions to explore AI in hiring and workforce management highlight the growing adoption of AI in business operations and the evolving relationship between technology and human labor.