A recent study by the National Bureau of Economic Research in Denmark indicates that the rapid adoption of Artificial Intelligence (AI) in workplaces has had a minimal impact on employee pay and work hours. The report, based on data from 25,000 workers across 7,000 offices, reveals that AI is not significantly transforming productivity or causing job losses in the roles most exposed to it, such as accountants, customer support specialists, financial advisors, HR professionals, software developers, and teachers.

Economists Anders Humlum and Emilie Vestergaard, the authors of the study, found that AI chatbots have had no significant impact on earnings or recorded hours in any occupation. Workers saved an average of three percent of their time due to AI, but only three to seven percent of these productivity gains resulted in higher pay. The study challenges narratives of imminent labor market transformation due to Generative AI, as it found no evidence of job losses or a large rise in productivity.

Despite these findings, some companies are still replacing workers with AI. Cybersecurity firm CrowdStrike recently announced it would cut five percent of its workforce and use AI instead. Language learning platform Duolingo also stated it would gradually stop using contractors for work that AI can handle, mirroring a similar move it made in 2012 with the shift to mobile technology.

However, other companies are reversing course after initial AI implementations failed to meet expectations. Swedish fintech company Klarna is bringing back human workers after heavily relying on AI for customer service tasks. Klarna executives admitted that AI customer agents could not match the quality of service delivered by humans, leading to a drop in performance after automating functions and cutting its workforce from 5,527 in December 2022 to 3,422 by the end of 2024. The company had used AI for tasks like translation, content creation, and data analysis, saving money but sacrificing quality.

Microsoft has also joined the trend of job cuts amid AI expansion, laying off about 6,000 workers, or nearly 3% of its global workforce. Among those let go was Gabriela de Queiroz, Director of AI for Microsoft for Startups. The company stated it was reorganizing to simplify management, with over 40% of the roles cut in Washington state being in software engineering.

Klarna’s move to rehire humans reflects a broader recognition that AI may not always deliver the expected quality and outcomes, especially in customer service. Other firms, despite initial moves towards AI-driven automation, are finding the need to balance AI capabilities with human expertise to maintain service quality and meet customer expectations.