Companies adopted AI quickly, hoping to increase productivity and reduce their costs by eliminating part of their workforce.
That’s why, two years ago, IBM slashed 8,000 jobs in human resources and replaced their routine tasks with its AskHR system. Financial technology company Klarna also laid off 700 customer-service experts, hoping AI tools would do the job.
Nevertheless, a few years later, Klarna CEO Sebastian Siemiatkowski admitted that AI agents without human support were not the “right fit” for his company. Empathy, smiles, innovation, and critical thinking — brought by real employees — are still needed. Klarna had to rehire humans. And it is not the only group rediscovering the virtues of human touch.
A recent survey of 1,163 executives in the US, Canada, the UK, Ireland, Australia, Hong Kong, Malaysia, and Singapore, published by workforce-planning software provider Orgvue, found that 39% of these leaders believed the deployment of AI would render a significant number of employees obsolete. Nevertheless, 55% of these same leaders regretted laying off people.
“Businesses are learning the hard way that replacing people with AI without fully understanding the impact on their workforce can go badly wrong,” notes Oliver Shaw, CEO of Orgvue. With AskHR, IBM automated repetitive tasks, but introduced delays in problem resolution, ethical dilemmas, and low morale that pushed the company to fatten other branches of the group, such as engineering, strategy, or client engagement, to humanize Big Blue.
McDonald’s also had to backtrack its automation push. The fastfood giant tested AI orders in 100 US drive-through restaurants. Internet users are still laughing at videos on TikTok showing customers’ misadventures. A young woman repeatedly asked for caramel ice cream, but the machine kept adding stacks of butter to her order. Another customer had hundreds of dollars’ worth of chicken nuggets added to their order. Last year, McDonald’s admitted defeat and took out automated orders. Nevertheless, the company was still playing with AI. McDonald’s recently switched from traditional hiring to Olivia, an AI hiring system. Hackers were intrigued and soon found the personal data of millions of job applicants. It’s not so easy to eliminate the human touch.