One of the key concerns about rising AI adoption is its potential to replace workers. Although generative AI is relatively new, these fears are anything but. Workers have been paranoid about new technology for hundreds of years, and many scribes probably felt a similar sense of uncertainty about the invention of the printing process during the Renaissance. Are companies actually replacing workers with AI yet? Are tech CEOs hatching these plans simply to cash in on the AI-fueled stock market, or are they viable from a business perspective? Several companies have already started replacing their workers with AI – and this is sparking widespread debate across the United States. If you are planning similar changes at your startup, consider speaking with a tech lawyer about the legal implications.

Salesforce Outlines Plans to Replace Workers With AI

Salesforce is openly admitting that AI may replace its workers in the near future. In September of 2024, CEO Marc Benioff spoke about its plans to integrate AI – stating that it was a “complete package” that required no “DIY” on the part of their customers. Salesforce is now focusing on building AI agents that require zero human supervision. These nonhuman agents will handle tasks like customer service, scheduling, and other relatively straightforward processes. It is not clear what makes Salesforce so confident about the lack of human oversight since AI models have made numerous mistakes over the past few years.

In the next 12 months, Benioff plans to create “a billion” of these AI agents – and he plans to charge customers $2 each time they have a “conversation” with this software. This came at a time of renewed optimism in the stock market – partly fueled by the Federal Reserve’s decision to cut interest rates by 50 basis points. The day after this decision, Benioff announced his AI plans – and Salesforce stock prices surged.

This announcement also comes at a period of continuing tech layoffs across the entire sector. While these layoffs have slowed since initial cuts, they nevertheless continue well into 2024 and beyond. The shift toward AI is part of this overall trend. As we will see, this trend is occurring in companies other than Salesforce.

Klarna Plans Replaces Thousands of Workers With AI

Another company making big moves in the AI space is Klarna. Days before Salesforce’s announcement, Klarna stated that it had already replaced “over 1,000” workers with AI solutions during the past 12 months. That being said, Klarna was careful to note that it did not actually terminate anyone in order to replace them with AI. Instead, the company seems to be implementing a more careful, “human” strategy. As of this writing, the company only replaces workers with AI after they have resigned. Combined with a “hiring freeze,” this policy allowed Klarna to reduce its total number of employees significantly.

Klarna has struggled in recent years to live up to its initial hype. Once valued at over $45 billion, the company is now worth just under $7 billion. The move toward AI adoption could be an attempt to both improve its market value and reduce its payroll expenses.

A more active replacement strategy could still be in the cards for Klarna. The “buy now, pay later app” announced plans to cut more than 1,800 workers at some point in the next few years, although they failed to provide a specific timeline. Like Salesforce, they seem to be focusing on chatbots. According to company representatives, their chatbot is capable of handling the workload of 700 human employees.

Commonwealth Bank Sparks Fears of AI Replacement

 The shift toward AI adoption is global, and it is affecting workers in countries like Australia. One notable recent story involves the Commonwealth Bank, a major player in the financial sector “Down Under.” The bank is now running trials of a new generative AI solution called “Hey CommBank,” and union leaders warn that it could soon replace numerous workers.

Union leaders also criticize these developments, claiming that decisions were made with zero input from both customers and workers. The potential for upheaval is considerable, especially when you consider the fact that the Commonwealth Bank currently employs thousands of call center employees.

Many Other Companies Have Already Replaced Workers With AI

 According to Tech.co, at least nine companies have already replaced their workers with AI solutions. The list includes MSN, which fired “dozens” of its journalists as early as 2020 in favor of generative AI. In other words, much of the content you read on MSN today is now written by AI – not humans. MSN claims that these decisions were difficult – but a necessary response to financial pressures within the company.

Google is another obvious example, and the company is going through multiple rounds of mass layoffs heavily implied to be associated with AI replacement. Ikea is one of the most recognizable brands in the world, and it recently created an AI bot called “Billie.” However, the replaced customer service workers were moved to different departments instead of being fired.

Duolingo terminated 10% of its contractor workforce recently in favor of AI-powered translators. However, this did not constitute an “official” mass layoff because the workers affected were not “employees.” There are many other companies participating in this transition, and new names are added to the list every day.

Can a Technology Lawyer Help With AI Integration?

Companies must take a measured approach when adopting AI at scale. This is not simply a matter of firing your workers, replacing them with software, and calling it a day. Companies today are transitioning in a more gradual, careful way. They are testing the waters before jumping in headfirst, and their integration processes consist of numerous moving parts. One key priority during this transition should be to consider the legal implications of AI integration. A consultation with a technology lawyer could prove crucial as startups begin replacing workers with AI, and John P. O’Brien may be able to offer valuable insights. Schedule a consultation today – and continue this conversation with an experienced AI tech lawyer.