Klarna, the global financial technology payment service, has announced a hiring freeze due to the increased use of generative artificial intelligence (AI). They join a growing list of technology giants implementing such measures, with IBM recently adopting a similar stance. Below, we explore why these companies have opted to introduce a recruitment freeze and what effect this could have in the future.
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Klarna Adopts Hiring Freeze Driven by Generative AI
Last week, Klarna’s CEO, Sebastian Siemiatkowski, announced that the technology giant would introduce a hiring freeze. Despite no plans to lay off current employees, Mr Siemiatkowski explained that the company aren’t currently hiring for any of their roles except engineers.
Furthermore, he talked about the positive impacts of generative AI on productivity and efficiency, outlining this as the reason for the hiring freeze. He explained that AI-powered tools like ChatGPT can deal with tasks better than humans. Also, he alluded to plans concerning Klarna’s service becoming a “personal finance assistant” as they implement more consumer-facing AI features.
Therefore, Klarna’s CEO believes “there will be a shrinking of the company” as AI slowly adopts tasks previously completed by employees. What’s more, he thinks this technology will become a threat to employment as a whole, with many people losing jobs to AI.
Hiring Freeze Becoming A Tech Company Trend
Klarna isn’t the only technology giant introducing a hiring freeze, with others previously announcing something similar. The CEO of the American technology corporation IBM stated the company would look to replace roles with AI where appropriate. They explained these measures would be introduced to embrace the transformative possibilities of AI. Meanwhile, the file hosting service Dropbox explained their workforce had been reduced by 16% as they, too, adopted AI solutions.
AI’s Impact on Future Employment
There have been many clashing opinions about the future of AI in and amongst human life. Elon Musk has previously stated that he believes AI will eventually take over all jobs in the future. This view is similar to that of Klarna’s CEO, and employees may fear redundancy following this hiring freeze pattern.
AI to Reduce the Working Week
However, individuals might take comfort in alternative viewpoints concerning how AI could be utilised in the future. For example, Tomoro, a company specialising in generative AI, aims to develop the technology to reduce the working week to just three days.
They claim AI won’t replace jobs; instead, it will enhance the productivity of employees and the tasks they complete. One of their aims includes improving the efficiency of large corporations by up to eight times their current output. As such, Tomoro believes AI shouldn’t be considered a job replacement but rather an enhancement.
97 Million New Jobs Made by AI
Alternatively, some have suggested the surge in AI will create new jobs. Despite roles like customer service being at risk of AI replacement, the World Economic Forum claims 97 million new jobs will be created by 2025. These include data scientists and programmers who could develop and maintain AI in the future.
Therefore, even if AI eliminates jobs, a plethora of opportunities could open in their place. As such, it might be the case where people take different career paths from what they envisage but still progress.
Ultimately, we are still determining the future of employment, with AI already around us and set to get smarter. Some may worry about how this hiring freeze pattern among big technology companies could affect the rest of the economy. Yet, hope isn’t lost, and those fearing job security should take comfort in the alternatives suggested.
In one reality, we may have to adapt and learn to work around AI; in another, our working lives may become easier through the help of it. Either way, if one of these turns out to be true, our jobs will be safe.
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