Canadian CEOs Embrace AI: A Double-Edged Sword for Workers

Canadian CEOs are embracing AI, but its impact on employees is uncertain. CEOs are bringing AI tools to everyone and mandating their use, with promises of increased productivity and lower costs. However, this could lead to layoffs and destabilization for workers. Meanwhile, Wikipedia faces an existential threat as editors fear that people will use AI chatbots to find information, making Wikipedia redundant. Shopify regained its position as Canada's most valuable company after a big second quarter.

Canadian CEOs are increasingly adopting generative artificial intelligence (AI) to enhance productivity and reduce costs, but the impact on employees remains uncertain. According to a recent report, more than a dozen CEOs have been in touch with Jason Smith, CEO of Klue Labs Inc., to discuss his bold move of laying off up to half of his employees to embrace AI [1].

Smith announced mass layoffs in June, stating that Klue would reinvent itself by integrating AI into every aspect of its operations. The company let go of 85 people, about 40% of its workforce, with most employees leaving voluntarily. Smith believes that a healthy company in an AI-first world is one that grows with fewer people, rather than merely adding staff [1].

The shift towards AI is not limited to tech companies. Established corporations such as Manulife Financial Corp. and Royal Bank of Canada are also rolling out AI tools to wider swaths of employees. At Royal Bank’s investor day in March, executives highlighted the company’s plans to leverage generative AI for increased productivity and cost savings [1].

However, the adoption of AI is not without its challenges. The technology can exacerbate income inequality and create bad jobs, according to Nick Frosst, co-founder of Toronto-based AI company Cohere [1]. Michael Serbinis, founder and CEO of Toronto-based tech company League, has made AI use non-negotiable for employees, reworking job descriptions to account for AI and evaluating employees’ AI usage in performance reviews [1].

The trend is also affecting hiring practices. Shopify Inc. and Open Text Corp. have indicated they will use AI to complete work before bringing in new employees. Adrian Schauer, CEO of AlayaCare in Montreal, has seen his company’s workforce remain stable while revenue has doubled, thanks to AI [1].

While AI offers significant benefits, it also poses risks. Layoffs are becoming more common as companies seek to automate tasks and reduce costs. Hopper Inc., an online travel company, laid off 30% of its staff in fall 2023 but has managed to grow revenue without adding employees, thanks to AI [1].

In the broader context, AI is also impacting industries beyond tech. Wikipedia faces an existential threat as editors fear that AI chatbots will make it redundant by providing instant information. Meanwhile, Shopify regained its position as Canada's most valuable company after a big second quarter, demonstrating the potential of AI in driving business growth [1].

The future of AI in the Canadian workforce remains uncertain. While it offers the promise of increased productivity and lower costs, it also raises concerns about job displacement and income inequality. As CEOs continue to embrace AI, it will be crucial to monitor its impact on employees and ensure that the benefits are distributed equitably.

References:
[1] https://www.theglobeandmail.com/business/article-canadian-ceos-embracing-generative-ai-speed-efficiency-impact/