Report: 90% of Executives See No AI Productivity Gains; Companies Rehire Laid-Off Staff
A new study indicates that approximately 90% of business executives do not believe AI has improved their company's productivity. Concurrently, some firms are rehiring employees they recently laid off.
A recent report, drawing on a Federal Reserve Bank of Atlanta survey, suggests that around 90% of business executives have not observed a boost in company productivity from artificial intelligence (AI). This comes amid a wave of tech industry layoffs, with some companies now beginning to rehire staff they previously terminated.
The survey indicates that factors such as remote work policies implemented during the pandemic have been more significant drivers of productivity increases since 2021, rather than AI. The underlying logic for many corporate decisions involving AI has been the assumption that it would enhance employee efficiency, allowing for a reduced workforce.
Analysis of data from U.S. public companies over five years revealed a correlation between increased announcements of AI investments and a rise in AI-related layoffs. However, the market reaction to these strategies has often been muted, with average stock returns near zero following layoff announcements. More than half of such events have resulted in negative or neutral market responses, suggesting potential hidden costs.
The study also delved into employee sentiment, analyzing millions of online reviews. Comments related to AI were found to be significantly more negative than general workplace reviews. Key concerns cited include job security risks, inadequate training, and skepticism about AI's actual efficiency benefits.
Amidst the broader tech industry layoffs, which have seen hundreds of thousands of workers lose their jobs, some companies are experiencing an "AI boomerang" effect. They are now rehiring former employees, recognizing that certain roles still require experienced personnel, even as trust between employers and employees may be strained.