Millions of employees may face job losses due to artificial intelligence, British trade unions are set to warn at next month’s Congress, according to the Financial Times.
The organizations will urge banks, insurance companies, and accounting firms to prepare to fund the retraining of millions of workers.
The unions reference a June report by Citigroup, which predicts that half of the jobs in the banking sector could be eliminated due to automation.
“The Congress notes with concern the June 2024 report indicating that up to 54% of jobs in banking and 48% in insurance could be replaced by artificial intelligence in the future. Job cuts due to AI integration are expected to impact the financial services sector more severely,” states the Congress document.
Meanwhile, Swedish company Klarna is preparing to cut nearly half of its workforce amid the adoption of artificial intelligence.
The firm’s CEO, Sebastian Siemiatkowski, noted that AI helped reduce the company’s losses in the second quarter from 854 million Swedish kronor ($84 million) a year ago to 10 million Swedish kronor.
Over the past year, the company has reduced its staff from 5,000 employees to 3,800. In a conversation with FT, Siemiatkowski mentioned that their numbers could be reduced to 2,000 in the coming years. Artificial intelligence is replacing workers in customer service and marketing.
According to the fintech firm’s CEO, AI offers advantages even if it leads to reduced employment, but this issue should be addressed by governments. Klarna increased its average annual revenue per employee from $400,000 to $700,000 through cuts and cost reductions thanks to artificial intelligence.
“I can achieve a higher income per employee, which allows us to pay top-tier salaries for the best talents, people who are currently deeply engaged in studying AI. A very strong message for our employees: lower overall labor costs, higher value per employee. I am very pleased to see this bearing fruit,” said Siemiatkowski.
In August, Amazon Web Services CEO Matt Garman outlined the timeline for replacing programmers with artificial intelligence.
In May, Elon Musk stated that the development of AI could eliminate the need for humans to work.