According to a survey conducted by the World Economic Forum in Davos (Switzerland), a quarter of chief executives worldwide expect that the deployment of generative AI will lead to headcount cuts of at least 5% this year.
According to a survey of PwC’s top directors, industries such as media and entertainment, finance, insurance, and logistics are most likely to anticipate job losses due to cutting-edge AI. This is according to a poll of PwC’s top directors, conducted ahead of the World Economic Forum this week. Automation is the least likely reason for job cuts in engineering and construction companies, along with technology firms.
The survey also revealed that 46 percent of respondents expect that generative AI — which can generate human-like text, images, and code in just seconds — will boost profits in the next year. The survey also revealed that 47% of respondents said they expect the technology to have little or no impact.
The findings are based on interviews conducted with 4,702 CEOs from 105 countries. This topic will be a prominent at the annual meeting.
Attendees include Microsoft’s Satya Naddella and Chief Sam Altman. Many economists expect AI to increase productivity as it becomes more widespread, but it will also cause a shift in the workforce.
PwC’s survey revealed that executives are increasingly concerned about the future of the economy, and the need to adapt to new developments such as generative AI or climate change.
Bob Moritz is the global chairman of PwC. He said that as business leaders become less concerned with macroeconomic challenges, their attention shifts to disruptive forces in their industry.
This is the year of transformation, whether it’s accelerating the deployment of generative AI and building businesses that can address the challenges of climate change.
The survey revealed that a growing number of executives plan to deploy generative AI over the next few months. This is after 32% reported having adopted it in their companies in the last year. 58 percent of respondents said that they expect generative AI to improve their product or service quality in the next year, and 69 percent said that their employees will have to learn new skills.
Goldman Sachs had predicted last year that AI breakthroughs could automate a quarter (25%) of work in the US and Eurozone. This would spark a productivity explosion that would eventually boost the annual gross domestic products around the globe by 7 percent over a ten-year period.
PwC’s survey revealed that executives are most concerned about cyber security, and spreading disinformation.
The study showed that in the short term, there is less anxiety about the overall outlook. Less than a quarter (25%) of directors reported that their company was “highly/extremely exposed” to inflation. This is a sharp drop from the 40 percent reading last year.
Approximately 38 percent of respondents thought that the global economy would be in a better position this year. This is double the 18 percent who said the same thing in 2023. This is a far cry from the previous optimism that was associated with the end of Covid lockdowns.
Investors are speculating that the US Federal Reserve, as well as other central banks, will begin reducing policy rates this spring.
PwC reported that executives in Asia and North America are the least worried about inflation. Around 20 percent of respondents said they were extremely or very exposed to price increases. Africa was the region where executives were most concerned about their company’s vulnerability to rising prices.
According to the survey, cyber-risks, geopolitical instability, and climate change were all ranked below inflation and macroeconomic risk.