Are we sleepwalking into an AI-induced recession? What smart companies – and employees – should do now

Is AI coming after your job?

When even the top tech bosses are warning about the impact of AI and automation on the workplace, you have to wonder.

Sebastian Siemiatkowski, CEO of the buy-now-pay-later firm Klarna, for instance, recently suggested that the level of unemployment on the horizon could drive economies into a recession.

He isn’t the only one. Dario Amodei, CEO of Anthropic, also said that policymakers weren’t prepared for the forthcoming rise in unemployment, which he believes could reach 20%.

If such economic turbulence is indeed on the cards, then how do we course correct? What can businesses or employees themselves do to ensure people remain employable in this new AI future?

“The best organisation –  certainly right now – they're going to be able to move fast because of their people, not despite their people,” says futurist Matt O’Neill, who also co-founded apexity ai,  which works with companies to become AI-ready.

Organisations should be making characteristics such as adaptability, curiosity and synthesising key performance indicators for work: “They're very human skills but they are going to be absolutely critical going forward,” he says.

Video: Futurist Matt O'Neill on getting AI-ready

We've been here before

Technological unemployment has been a common phenomenon throughout historical innovation, from the Industrial Revolution to the invention of the printing press.

The dawn of generative AI has been compared to the same. Its transformative impact could touch literally every sector, from curing disease to how local authorities manage services. Even more so with the rise of Agentic AI, where AI systems of autonomous agents make business decisions with little human supervision.  

Inevitably, when the operational tasks are no longer needed, some roles become redundant. And while new roles may emerge for individuals, a degree of reskilling may be necessary.

Figures vary on what unemployment may look like. For example, the International Labour Organisation suggests that the impact will be mostly felt among clerical workers, including customer service workers, receptionists or secretaries – job losses in these markets would mostly affect women.

Meanwhile, a recent World Economic Forum survey found that 41% of employers intend to downsize their workforce due to AI automation. Bloomberg Intelligence found that worldwide, banks are likely to cut 200,000 current roles over the next three to five years.

Premature analysis

As far as a recession is concerned, economist Kash Hussain says it is too early to make such a sweeping statement.

“The key thing would be in terms of how does it impact the businesses in the short run, in the medium term and in the long run.

“I think a lot of times, as well as with new technology, either its benefits or its disadvantages are overestimated and eventually we reach a point where it is evaluated  a lot more once we have a better set of data to be able to make an objective assessment,” he says.

“I think the challenge is that we or organisations are sometimes sort of going into this, either blindly or naively or rapaciously,” says futurist O’Neill, who also founded apexity ai – which works with companies to be AI-ready.

O’Neill explains that businesses are either seeking ways to get rid of employees because of increased efficiencies, burying their heads in the sand pretending it isn't happening, or they’re taking a mature approach, asking, ‘What does AI enable our people to do?’ 

For example, one positive approach he has seen in the legal sector is that one business aims to double its turnover over the next five years, while keeping everyone in the company and upskilling its people in new technologies.

Whose responsibility is it anyway?

As far as the responsibility businesses have for their workers, O’Neill says that, at the least, they should be transparent, fair and honest: “If you can't explain the human impact of what you're doing with AI in the organisation, you're not ready to put it in yet.” 

Businesses may also offer reskilling but that comes with inherent tension.

“Sometimes what firms are asking people to do is get much more advanced with these tools. And on some level, the elephant in the room is that some people probably fear that their jobs could ultimately be displaced by these technologies,” he says.

However, there’s nothing stopping individuals from taking advantage of the learning tools around them and upskilling themselves, with some awareness of the change that’s to come. That could mean using YouTube, continuing education or pivoting by starting a freelance career or a business.

“It’s a completely different mindset and that is so much of what I think is kind of missing right now,” he says.

Along with a change of mindset, people may need a whole new skill set to be empowered in this new era.

The age of humanity

“For a long time, we've been living in the age of technology, which has given us data repetition; in many ways, it could be referred to as the age of knowledge. But we've now stepped into something so much more powerful, which is the age of humanity,” says education consultant Colin Cooper.

Cooper, who works with students and businesses to develop the skill sets they need in this new age, says AI will ultimately free people up to do what humans are very good at, which is “being the architects of what's coming next.”

He explains there are four principles we need to teach right now: curiosity, critical thinking, creativity and emotional intelligence.

“The question that you need to be asking is, what can I do as a person to level myself up and use AI as a tool,” says Cooper.

“If you remember when the calculator came out, everyone said that no one [would need] to do maths or anything like that. The reality is it just allowed us to do more complex maths,” he adds.

What’s more, new industries could spawn out of it.

“I'll tell you where I think the next trillionaire will come from,” says O’Neill, “It'll come from an emerging area called hyperlocalization.”

He suggests that emerging technologies, such as blockchain, will enable radically decentralised ownership and income streams, with economic models centred on local, tokenised assets. For example, instead of one commercial building being owned by one or two owners, it could have 100,000 owners, with the rents divided among them equally.

To put it in perspective, there is still some way to go before AI can eliminate the need for people-based work but it may serve humanity better if we don’t wait around for AI to catch up.

Video: Colin Cooper on critical human skills in the AI era