The Great AI War on Jobs

**Peter Buchanan** (0:08)
Welcome to the AI to ROI podcast. I am Peter Buchanan. I am the managing partner of Newplan.

**Ray Rike** (0:15)
And I'm Ray Rike. I'm the founder and CEO of Benchmarkit.

**Peter Buchanan** (0:19)
And this week, we're going to talk about what we call the great AI jobs war. AI has created tremendous upheaval in the workplace. And so let's get started, Ray. How should we think about the great AI jobs war?

**Ray Rike** (0:36)
Well, one of the things I've always been told and I believe is that history is the best predictor of the future. So to me, how AI is going to impact jobs is going to be an accelerated version of what we've seen over the last 100 to 150 years, starting with the Industrial Revolution and the Mechanization and Manufacturing in both the US and the UK. So that was what, like in the mid 1800s to late 1800s?

**Peter Buchanan** (1:05)
You bet.

**Ray Rike** (1:06)
And then the famous Eli Whitney and his creation of the cotton gen transformed how we actually conduct agriculture. And then one of my favorites, and as you know, I used to lead the manufacturing automotive industry at our division of GE when we first met, it's Frederick Taylor's time in motion studies that he did in partnership with Henry Ford and led to the assembly line concept for the Model T. And then lastly, we had the digital revolution kind of in the 1980s and 1990s, where we disrupted some enterprise workflows through automation. And as much of those impacted civilization, I think what AI is going to do is going to be faster and with greater magnitude than any of the things I just mentioned.

**Peter Buchanan** (1:57)
All right, so let's get specific. CEOs have totally drunk the Kool-Aid for AI, and they're promising their boards and investors major productivity gains. They're saying they're happening right now. They're around the corner. But the reality is that AI driven productivity gains are pretty uneven, and they're elusive for most companies. You feel like you're getting there and you don't quite make it. It's like a game of Mother May I. So the only thing that's really certain is that AI is absolutely crushing the hopes of early career employees, which we're going to talk about in a little while in more detail. Yet CEOs are just lethal. So Ray, how are CEOs portraying the progress of AI?
And what's the actual reality?

**Ray Rike** (2:48)
Well, it was really appropriate that you said they're drinking the cool aid because aid starts with AI. So they had to be drinking something to add AI in it, right? So the first thing that you can tell that when something's a real trend is, is it being talked about on earnings calls? So Peter, you did some great research on this. 306 of the S&P 500 companies mentioned AI in their QT earning calls. By Q4, AI had become the number one topic appearing in 47% of those earnings calls. And things like agentic AI and digital labor, just those terms from your research, increased 779% year over year. But that's the hope, the vision. The reality is, only about 10% of companies are reporting meaningful AI to ROI benefits. With a staggering 56% saying they're getting little to nothing out of it, at least little to nothing that they can measure and show in their income statements. But AI is being used for a lot of labor productivity impact. By the way, I do this other podcast called The Metrics Brothers with Dave Kalong, and we just talked about how US labor productivity is being impacted by AI.
But here's some examples that have been credited or blamed on AI. Amazon, 30,000 jobs have been cut since October, partially attributed to AI. Dow Chemical, 4,500 layoffs, explicitly linked to AI. Even Pinterest, here it is, a social media digital first company, 15% workforce reduction tied to the efficiencies from AI. And Forrester, they're calling this AI washing, attributing financially motivated cuts to AI implementations that have just begun and really aren't delivering the ROI yet.

**Peter Buchanan** (4:48)
Wow, that's kind of harsh. So let's dive a little deeper here. A few companies are getting tremendous value out of AI and they produce some cold hard metrics. So give me a couple of examples there where there have been workforce impacts that are really significant but the results have been absolutely spectacular.

**Ray Rike** (5:15)
Yeah, and I think it was in the AI to ROI newsletter that we published on Monday, February 9th that you had uncovered this amazing fact. I'd like you to add to this and it was about Klarna. Now I remember Klarna from about 18 months ago because they came out and said, we just use AI to code a copy, not a copy, that's a bad word, our own CRM to displace Salesforce and everyone said, you're never going to be able to use AI to code. But here's some of the Klarna results. They've reduced their organization from 5,000 employees to 3,000. They've doubled their revenue in that time frame. And Peter, I think they've actually increased their revenue per employee. Can you share some of the details on how much they've increased revenue per employee?