AI Replacing ‘Lower-Value Human Capital’

After a major multinational bank revealed plans to slash more than 7,000 jobs, the financial institution’s CEO said artificial intelligence (AI) is going to replace “lower-value human capital.” The CEO’s comments sparked widespread backlash online, with many calling his characterization of workers dystopian and demeaning. As companies move to automate, is there a path forward for displaced employees?

AI vs Human Capital

Thousands of workers at Standard Chartered, a British multinational bank, are going to lose their jobs, but according to CEO Bill Winters, the layoffs are not a cost-cutting measure. Rather, they are “replacing in some cases lower-value human capital with the financial capital and the investment capital we’re putting in [to AI],” Winters told reporters in Hong Kong on Tuesday.

Artificial intelligence strikes again – but did the CEO have to reduce impacted workers to “lower-value human capital?” This is exactly the kind of language that is fueling opposition to AI and the data centers that are needed to power it. Business and tech leaders would do well to remember: while the intelligence may be artificial, the lives and families of laid-off employees are very real.

Winters said impacted workers will receive “good clear notice” of any layoffs before throwing a little corporate spin into the mix: “We don’t have job losses, but we do have job role reductions in favor of the machines, and that will accelerate as we go forward into AI.”

The bank staffs nearly 82,000 workers globally, and Winters said some employees will be able to retrain in order to maintain their employment. "So, the people that want to reskill, that want ⁠to carry on, we're giving every opportunity to reposition," Winters claimed. The CEO said the financial institution’s back-office roles based in Chennai, Bengaluru, Kuala Lumpur, and Warsaw are most likely to be impacted by the shift to AI.

AI Pessimism Abounds

Many Americans are worried about what artificial intelligence could mean for the job market and the broader economy. According to the most recent Economist/YouGov survey, “[M]ore Americans are pessimistic than optimistic about AI's long-term effects, but the source of that pessimism varies with age.” Over 70% agree AI is developing too quickly, and most Americans “are skeptical that everyone will benefit economically from AI.” While young Americans believe AI will open doors to greater economic growth, they are also concerned that the technology will “replace jobs they depend on.” YouGov explained:

“Americans with lower family incomes are more likely than those with higher incomes to worry about AI replacing jobs. A majority (56%) of Americans with family incomes under $50,000 per year are somewhat or very worried about AI replacing jobs they rely on, compared to 47% of Americans with higher family incomes.”

Naturally, average Americans are concerned about AI replacing their jobs. Nearly every day, there’s a new report about AI-powered layoffs or another CEO openly discussing plans to hand jobs over to machines.

Earlier this year, CEO of Microsoft AI Mustafa Suleyman predicted that most work “at a computer” will be run by AI by 2027. Ford CEO Jim Farley claimed last year that “artificial intelligence is going to replace literally half of all white-collar workers.” “AI will leave a lot of white-collar people behind," Farley said. When CEOs casually discuss widespread job losses and describe workers as “lower-value human capital,” is it any wonder why there’s growing hostility toward AI? If business leaders want the general population to get behind artificial intelligence, then they need to explain in great detail the path forward for displaced workers.