Employees across the workforce often collectively hold their breath in dread whenever another big company announces layoffs attributed to the work automating capabilities of artificial intelligence (AI) tools. But new data suggests there’s another, stealthier threat to employment these days: the so-called “ghost downsizing” by smaller businesses that no longer fill vacated jobs, and spread their orphaned tasks to remaining staff and recently introduced apps.
To be sure, managers asking survivors of layoffs to assume some of the work of their unlucky departing colleagues isn’t new. In the past, however, relief usually arrived when the financial pressures that led to reductions abated, allowing recruitment to resume. But that cycle may now be ending. A new survey by Polish tech research firm Omni Calculator found nearly a third of employees reporting “ghost downsizing” to be on the rise, often among employers automating tasks of newly vacated positions with AI. Work that apps can’t do is instead shifted to remaining staff, allowing managers “to maintain or increase output without proportional headcount growth,” a report on the findings said.
‘Gap between employee and executive perceptions’
But in stark contrast to large companies announcing big staff cuts as AI tools take over jobs, business leaders undertaking gradual, moderate phantom headcount reductions aren’t copping to the practice. A large portion of employee survey respondents, however, called their bosses out on it.
“One of the survey’s central findings is a gap between employee and executive perceptions of workforce compression,” the report said. “Among employees surveyed, 30 percent said their team had shrunk while workload either increased or stayed the same. By comparison, 10 percent of executives reported the same pattern.”
Identifying and quantifying those diverging views was a key objective of the survey. Not only did that measure staff views that “ghost downsizing” is afoot, but it also linked it to what may not always be visible effects of AI adoption.
(T)hese findings suggest some AI-linked workforce changes may be occurring through hiring pauses, unfilled vacancies, and workload redistribution rather than through highly visible layoff announcements,” the report said.
While AI-driven mass layoffs at corporations generate lots of headlines and analysis, the slower, gradual changes the tech is affecting in smaller businesses is far less evident. Indeed, the polls’ findings, seek “to help employers, employees, analysts, and the broader public better understand how AI adoption is appearing inside organizations before it is reflected in formal workforce-reduction disclosures,” the report said.
Why is attaining greater clarity important? For starters, the very nature of “ghost downsizing” makes it harder to notice, and requires more time for staff to realize it has become a workplace factor.
Meanwhile, in addition to diverging employee/management views on whether that headcount reduction is even happening, there are also and perception gaps, about how, why, and when AI is being adopted in smaller workplaces—as well as its impacts.
For example, a surprising 43 percent of employees, and 53 percent of executives maintained that AI had in no way shaped hiring or headcount levels in their companies, despite evidence elsewhere strongly suggesting otherwise. Those surprising views may be an outgrowth of how the tech is often being passively introduced in many workplaces.
Just 23 percent of responding business leaders said their companies had a formal AI preparation program, with a dedicated budget for it. Another 40 percent described AI transition in the workplace as an ad hoc, rather than organized process.
Consensus on the jobs AI is haunting
Despite their differences on whether “ghost downsizing” is at work in their companies—and whether introduction of AI is driving that—responding workers and managers agreed on other aspects of the tech’s spread.
Nearly 60 percent of both employees and executives said “physical or hands-on work” reduced the risk of a job being automated away. A majority from both groups also cited strong “interpersonal communication skills” as another protective asset against being replaced by an app.
Similarly, 38 percent of employers and 27 percent of workers said creativity and strategic thinking were strengths that AI would struggle to match.
By contrast, remote work was viewed as particularly vulnerable to AI replacement. Fully 75 percent of those employees expressed fear of job loss from apps being used to perform them. That outlook was also supported by a recent Gallup poll indicating remote employees make up “a disproportionate share” of unemployed U.S. workers.
Another big factor in fearing AI could lead to job loss was the income respondents are paid for their work.
“Workers earning under $60,000 annually were nearly three times more likely to report actively planning a career exit due to automation than workers earning more than $100,000 annually,” the report said. “The survey found that higher-income workers were more likely to view AI as a productivity tool, while lower-income workers were more likely to view it as a direct employment risk.”
That suggests that even as lower-paid employees struggle to get by on their comparatively modest incomes, they’re also increasingly haunted by the prospect of AI “ghost downsizing” their jobs away.
—Bruce Crumley
This article originally appeared on Fast Company’s sister website, Inc.com.
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