Generative AI Expected to Drive Workforce Changes and Boost Profitability

A significant 25 percent of global chief executives anticipate that the deployment of generative artificial intelligence will lead to at least a 5 percent reduction in workforce this year. This forecast emerges as leaders convene in Davos, Switzerland, highlighting AI's transformative impact across various industries.

Sectors like media and entertainment, banking, insurance, and logistics are most likely to foresee job cuts due to advanced AI technologies, as per a survey by PwC. In contrast, engineering, construction, and technology firms are less likely to expect such reductions.

Nearly 46 percent of surveyed executives predict that generative AI will enhance profitability within a year. However, an almost equal 47 percent foresee minimal impact from the technology.

The survey, involving 4,702 company heads across 105 countries, underscores the broad implications of AI on global economies and societies. AI pioneers like Sam Altman of OpenAI and Satya Nadella of Microsoft are participating in these critical discussions. Economists generally agree that while AI promises productivity gains, it will also necessitate workforce adaptation.

Executives are increasingly recognizing the dual challenges of embracing generative AI and addressing climate change. About 32 percent have already implemented generative AI in their operations, with 58 percent expecting improved product or service quality and 69 percent acknowledging the need for new employee skills.

Goldman Sachs has projected that AI breakthroughs could automate a quarter of work in the US and eurozone, potentially increasing global GDP by 7 percent over a decade.

The PwC survey also highlights concerns about cybersecurity and the spread of disinformation as key risks associated with AI.

Current economic outlooks show reduced anxiety about inflation, with less than a quarter of directors feeling highly exposed, a decrease from last year’s 40 percent. Optimism for global economic improvement has doubled since 2023, signaling a recovery from the inflation surge beginning in 2021. Investor speculation suggests possible central bank rate cuts in the near future.

Inflation and macroeconomic volatility remain the top concerns among global executives, surpassing cyber risks, geopolitical instability, and climate change challenges.

Which sector do you think will be most impacted by generative AI in terms of job cuts?

• Media and Entertainment
• Banking and Insurance
• Logistics
• Engineering and Construction

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