Since the inception of AI, there has been continuous concern and intrigue as to whether it will affect the job market, in regards to eventually taking over jobs. Whilst a future of robots spearheading the workforce is still some way away, automation has played a big role in the digital shift for major businesses and we have seen a steady trend in businesses opting for a digital shift.

Research has revealed that in some UK sectors, over half of the jobs are at risk of being taken over by robots within the next 11 years.

Over the last few months, major companies in the UK and around the world have made major cuts to their workforce in a bid to move forward with the intention to focus more on digital operations. 

Among some of the major names that have announced job cuts include Lloyds Banking, Sky, Santander, Sony and EA (Electronic Arts). Whilst every organisation will have its reasons for making such cuts, sometimes with consumers in mind, this is bound to affect operations internally. Santander’s plan to create a fully digital platform in the US was their reasoning. 

Why are major companies cutting jobs and favouring digital in the long run? 

Automation: With the advancement of technology, many tasks and performed by humans can now be automated using various digital tools and software. As a result, companies are able to achieve greater efficiency and cost savings by replacing manual labour with automated systems; reducing costs in the process. 

It’s cost-effective:  This brings us to the next point. In many cases, transitioning to digital platforms and processes can result in significant cost savings for companies. This can be achieved through savings on materials, equipment, and other important resources.

Streamlining operations: Digital technologies enable companies to streamline their operations and reduce the need for redundant or unnecessary roles. By implementing digital platforms for tasks such as data analysis, customer service, and inventory management, companies can operate more efficiently with fewer employees. Although the concern as to whether AI could ‘takeover’ jobs will remain. 

Globalisation: The digital shift has facilitated globalisation by enabling companies to operate on a global scale more easily. While this can create opportunities for growth, it also means increased competition, which can potentially lead companies to downsize to remain competitive.

Aiding changing consumer behaviours: As consumers increasingly turn to digital channels for shopping, communication, and entertainment, companies must adapt to meet their needs. This may involve shifting resources away from traditional manual operations and towards online platforms, resulting in job cuts in certain areas. Whilst this increases convenience for consumers, workforces and employees are forced to adapt as a result. 

Disruption from digital competitors: The rise of digital-native companies and startups has disrupted many traditional industries, forcing established companies to reevaluate their business models and strategies. In some cases, this may involve restructuring and downsizing to remain competitive in the digital marketplace.

Summary 

The digital shift is fundamentally changing the way companies operate, and while it presents opportunities for growth and innovation, it also necessitates difficult decisions such as job cuts to remain agile and competitive in an increasingly digital world.