About 90% of executives see no productivity growth from AI — Fortune
About 90% of company executives believe that artificial intelligence has not yet increased their businesses’ productivity. At the same time, some companies are cutting staff, linking such decisions to the implementation of AI, according to an article by Fortune, reprinted from The Conversation. The article’s author is Mark Ma, a professor of business administration at the University of Pittsburgh.
A study by the Federal Reserve Bank of Atlanta found that most surveyed executives had not recorded an impact of AI on productivity. According to the author’s assessment, overall productivity growth since 2021 may be linked to remote work or other factors, including layoffs in the technology sector.
AI investments and layoffs
Mark Ma and his colleagues analyzed millions of employee reviews about work, thousands of companies’ financial results reports, as well as hundreds of announcements about AI investments and layoffs at U.S. public companies over the past five years. The researchers found a connection between more frequent announcements of investments in artificial intelligence and reports of job cuts that companies linked to AI.
The authors note that managers may expect to complete the same volume of work with fewer employees thanks to AI and to reduce labor costs. Some companies in the sample began cuts even before significant investments in AI in order to free up funds for such investments.
More current news is available on the UA.News Telegram channel Telegram.
The stock market’s reaction to announcements of AI-related layoffs was on average close to zero. In more than half of the cases examined, it was negative or nearly zero. At the same time, fintech platform Block recorded an increase in its share price after announcing its intention to reduce staff because of AI.
Employee sentiment and productivity
The researchers separately analyzed reviews on the Glassdoor platform. Comments concerning AI had a noticeably more negative tone than the overall body of employee reviews. Reasons for dissatisfaction included fear of losing jobs, a lack of training and upskilling opportunities, weak management of AI implementation, and doubts about its effectiveness.
The most important factor, according to the authors’ conclusion, was concerns about employment stability. After announcements of artificial intelligence-related cuts, employees’ attitudes toward the technology deteriorated sharply. The authors also found a strong connection between staff attitudes toward AI and companies’ productivity indicators.
An analysis of approximately 10,000 transcripts of earnings conference calls showed that company management generally speaks optimistically about AI. At the same time, this optimism had no statistically significant connection with productivity indicators. The authors believe that companies should invest in employees’ skills and expanding opportunities rather than use AI primarily as grounds for layoffs.
