AI and the Job Market: Early Signs Show Mixed Outcomes

Conflicting Signals from AI Adoption in the Workforce

The economic impact of AI on the job market is still unclear as companies and researchers present contrasting perspectives. Duolingo, for example, announced plans to become an “AI-first” company, with CEO Luis von Ahn stating the company would gradually stop using contractors for tasks AI can handle. This shift began in 2024 when contractors protested layoffs after receiving emails about being phased out. An email shared on Reddit detailed how some team members were let go while others remained to review AI-generated content.

Companies Emphasize AI to Boost Productivity

Duolingo’s CEO frames AI integration as a way to eliminate bottlenecks and allow employees to focus on creative tasks rather than outright replace humans. Similarly, Shopify’s CEO Tobi Lütke told teams they need to justify new hires by demonstrating why AI cannot accomplish the tasks. The general implication is that tasks suitable for automation should be handled by AI, while humans move on to more complex, higher-level work.

Ambiguity Around ‘Higher-Order’ Work and Quality Concerns

However, what constitutes this ‘higher-order’ work is vague, and there is debate about whether AI can match the quality of original human work. Von Ahn even acknowledges a slight quality drop is acceptable for the sake of speed.

Research Finds Limited Short-Term Impact on Jobs

Contrasting these corporate stances, economists Anders Humlum and Emilie Vestergaard analyzed data from over 25,000 workers in AI-exposed occupations like software development, journalism, and accounting. Their findings revealed no significant impact of AI chatbot adoption on earnings or recorded work hours, despite widespread AI tool usage.

Productivity Gains Offset by New AI-Related Tasks

Humlum explains that while AI saves time, these gains have not yet resulted in increased output or higher pay. New tasks such as prompt engineering and quality control offset productivity improvements. This suggests AI is changing the nature of work rather than reducing labor demand, at least for now.

The Road Ahead Remains Uncertain

Although some companies promote an “AI-first” philosophy, actual changes appear gradual and complex. Duolingo emphasizes supporting employees with training, mentorship, and AI tools rather than layoffs. Shopify has not announced major AI-related layoffs either. The overall picture is one of uncertainty, with AI poised to disrupt workplaces but the full impact still unfolding.