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IBM and BT replace workers with AI, UK cashes in its chips – May 2023 in review

Two big-name employers revealed how automated systems could replace human workers.

By Matthew Gooding

Tech job cuts continued at a pace throughout the first half of 2023, and in May two big name employers revealed they were expecting machines to pick up the slack.

The idea that artificial intelligence will replace human workers is one of the most enduring negative narratives around the technology, and in May two major employers gave us a glimpse of what that might look like in practice.

IBM says its Code Assistant will be expanded to support modernisation of other products in the future (Photo: Nick N A / Shutterstock)
IBM plans to replace some back office job roles with AI (Photo by Nick NA/Shutterstock)

IBM said it was slowing or pausing hiring for back office roles as it considered replacing staff with AI. The company’s CEO Arvind Krishna revealed his plan to eliminate up to 30% of administrative jobs at the company, or some 7,800 posts, with automated systems taking their place.

Krishna made his comments in an interview explaining why his business was not taking on new staff in its back office. At the time it employed 26,000 people in these sorts of roles. “I could easily see 30% of that [26,000] getting replaced by AI and automation over a five-year period,” Krishna said.

Meanwhile, BT revealed it will make 55,000 job cuts by the end of the decade, with up to a fifth of those roles being replaced by AI. The telco’s then-CEO Philip Jansen, who has since been replaced by Allison Kirby, said it was part of a plan to cut costs and boost profitability as the UK’s 5G and fibre broadband roll-out comes to an end.

“For a company like BT there is a huge opportunity to use AI to be more efficient,” Jansen told investors. “There is a 10,000 reduction [in staff] from that sort of automated digitisation, we will be a huge beneficiary of AI.”

Research from Goldman Sachs released earlier in the year suggested up to 300 million jobs could be lost or degraded by advances in AI.

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Chips with everything

The absence of a UK semiconductor industry strategy has become something of a running joke in recent years – a report from parliament’s business, energy and industrial strategy committee, released in February, described the government’s ongoing failure to publish the document – more than two years in the making – as an “act of national self harm”.

But after a string of delays and broken promises, the UK semiconductor strategy finally emerged in May, promising a £1bn investment in the sector over the next decade. Focusing on the UK’s existing strengths in design, R&D and compound semiconductors, it set out the intention to form a new UK Semiconductor Advisory Panel, bringing together key figures from industry, government and academia to work together to deliver the strategy. The advisory panel will speak on behalf of the sector and provide advice and feedback in a bid to improve relations between the government and the industry.

While the strategy was welcomed by many in the sector, others feared it didn’t go far enough, pointing out that £1bn over ten years is an insignificant figure in what is a notoriously capital-intensive industry, where a single chip manufacturing plant can cost upwards of £15bn.

Dr Elizabeth Stephens, founder and managing director of Geopolitical Risk Advisory, told Tech Monitor that the measures laid out in the strategy may not be sufficient to protect UK businesses in the event of another chip shortage, such as the 2021 crisis that left many companies without access to key components. “The UK does not have a semiconductor manufacturing capability of any scale and the government has apparently decided that it never will have,” Stephens said.

May also saw the UK sign the ‘Hiroshima Accord’ with Japan, with the two countries agreeing to work closely together on tech industry issues including semiconductor supply.

More from May 2023

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