Why CEOs are using AI to scare workers
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Chief executives are giving employees an AI fright — warning them the new technology could make many workers obsolete, while at the same time urging them to start using it right away.
Why it matters: That's a scary and mixed message, and fear is generally considered to have a bad track record as a management technique. At the extremes, managers could actually wind up inhibiting workers from adapting to AI.
Catch up quick: In a post earlier this week, Amazon CEO Andy Jassy offered his thoughts on generative AI. In paragraph 15, he gets to the scary bit:
- The transformation will likely "reduce our total corporate workforce."
- Jassy is echoing the message of many other leaders. JPMorgan's consumer chief recently told investors AI would allow for a 10% headcount reduction. Other companies have already blamed AI for layoffs.
- Meanwhile, there's a constant barrage of surveys and dark warnings about AI taking jobs.
Zoom out: Here are a few explanations for the wave of hard-nosed AI messaging:
Genuine belief: Executives are concerned about AI's impact. They believe employees aren't taking it seriously enough, says Brian Elliott, a leadership consultant.
- Some lean toward "a more balanced message," he says. They suggest they'll be slowing or stopping hiring, while imploring workers to adapt.
- Shopify CEO Tobi Lutke did this in an email to employees. Rather than threaten layoffs, he says using AI is now a "baseline expectation" at the company. Before any new hiring, managers would have to demonstrate that AI couldn't fill the role.
- Lutke ultimately posted this internal message publicly.
Setting expectations: It's a way to make chief executives look more transparent, and gives them cover to conduct future layoffs without shocking employees, says Jeffrey Sonnenfeld, a professor at Yale School of Management.
- All this talk has an "inoculation effect," he says. "A warning with an anticipatory alert that preempts later trauma going viral."
Appealing to investors: The tough talk is for Wall Street, a signal that a company is on trend. (It doesn't hurt that investors tend to like layoffs.)
Talking their book: AI companies, and the firms making massive investments in the tech, have a story to sell about how valuable it is.
- "Some of the loudest voices are the AI arms merchants," Elliott points out.
- They need to free up revenue to pay astronomical sums for AI power and talent.
Friction point: Managing through fear doesn't usually work, decades of research has shown.
- Scaring employees could inspire them to action. But there are "toxic effects over the long run," as Wharton professor Andrew Carton explained in a post a few years ago.
- It can stifle creativity, inhibit collaboration and lead to burnout, he said.
- "A lot of employees look at this and say, 'This is going to be my robot replacement. Why would I use this? Why would I help train this if this is going to eventually replace me in my job?'" Keith Sonderling, the deputy Labor secretary, said at an executive conference earlier this week.
