The Outsourcing Week in Review (Future of Work): May 5, 2023

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Welcome to Inside Outsourcing: The Outsourcing Week in Review


Are robots taking over our jobs? Is remote work here to stay? Join us here in Inside Outsourcing: Future of Work edition as we uncover this week’s trends that will shape the workplace of tomorrow. Let’s get into it!

The generative artificial intelligence (AI) sector is expected to reach US$98.1 billion by 2026, with a ridiculously large compound annual growth rate (CAGR) of 32%. Generative AI is a type of AI that can create a wide variety of data, such as images, videos, audio, text, and 3D models. According to capital market firm PitchBook, venture capitalists are eager to invest in generative AI despite the drop in startup funding in 2023. David Beisel, cofounder and partner at NextView Ventures, added that the sector “is where the outliers are happening right now.” As of March 29, the median pre-money valuation for the market soared to US$90 million, more than double its total 2022 value of US$42.5 million.

ChatGPT — the big dog of AI tools (today) — returns to Italy after it was banned by the Italian Data Protection Authority (GPDP) for unlawfully collecting user data and not preventing minors from accessing inappropriate material. According to its parent company OpenAI, changes were made to satisfy regulators’ demand, including a form to safeguard personal data and a tool to verify a user’s age.

Meanwhile, the GPDP urged the company to comply with two other demands for an age-verification system and a publicity campaign informing Italians about the backstory and their right to opt out of data processing.

Billionaire entrepreneur Elon Musk is reportedly looking to compete with OpenAI by creating his own AI firm called X.AI. According to New York Times, Musk hired top AI researchers from Google’s DeepMind and is in talks with Professor Jimmy Ba to establish the company. The entrepreneur is known to have a contradictory view on AI, stating that it “ultimately benefits and destroys humanity.” However, Musk believes he can offer better and safer AI alternatives than his competitors. The billionaire helped found OpenAI in 2015 but resigned from its board in 2018 due to a growing conflict of interest.

While generative AI is a positive development for businesses and innovators, it could also affect the human workforce.

For example, tech giant IBM orders a hiring freeze for roles AI can replace. According to IBM CEO Arvind Krishna, the firm will suspend or slow hiring around 26,000 non-customer-facing workers as these can be easily automated. Krishna estimates that up to 30% of these roles could be replaced by AI over the next five years, resulting in roughly 7,800 job losses.

Similarly, file hosting platform Dropbox is cutting off 16% of its workforce as it shifts its strategy to meet new demands in AI development. Dropbox Co-founder and CEO Drew Houston explained that recent developments in AI technology expanded the potential market, alerting competitors to the same opportunities. The company expects to incur charges between US$37 million to US$42 million in severance payments and employee benefits due to the layoffs.

ChatGPT itself is unsure of AI’s impact on the human workforce. In an interview with Outsource Accelerator’s Derek Gallimore, GPT pointed out that while some experts believe AI could lead to job losses and a decline in outsourced services, others argue that it could create new employment opportunities. The AI tool added that its exact impact on the outsourcing industry and the workforce would depend on various factors, including the tasks needed, AI capabilities, and the laws and regulations in place.

In other news, Clearlink’s CEO James Clarke made headlines for his remarks on remote work and parental productivity. In a virtual town hall, Clarke said many of his remote employees “quietly quit” and didn’t even open their laptops for a month. The CEO also expressed skepticism about the ability of full-time caregivers to be productive employees. These comments came as Clearlink started its return-to-office (RTO) mandate amid the surprise of its employees who were promised a “remote-first” setup.

Meanwhile, 58% of workers expressed concerns about the negative impact of RTO mandates on their mental health. In a new survey by organizational consulting firm Korn Ferry, most employees prefer work-from-home (WFH) to avoid the inconvenience of commuting and preparing for work. Korn Ferry Associate Client Partner Dr. Flo Falayi said employees would thrive if their employers trusted them to operate in a hybrid environment.

Mexico is making efforts to reduce the stress of its workforce. The Chamber of Deputies recently approved a landmark bill that reduces the country’s workweek from 48 to 40 hours, with at least two days off for every five days worked.

The Citizens’ Movement party put forward the bill after Mexico led the list of countries with the highest number of working hours in 2021 by the Organisation for Economic Cooperation and Development (OECD). The World Health Organisation (WHO) also rated Mexico with the highest work-related stress levels. If the bill becomes law, workers will receive overtime pay for hours beyond the prescribed 40.

Time to manage your stress!

The future of work stories this week​..

3 May 2023

2 May 2023

1 May 2023

  • Workers wary of RTO’s effect on their mental health – read article…
  • Dropbox CEO blames recent layoffs on AI  – read article…
  • Developers, employers integrate AI in the workplace — HackerRank – read article…

28 April 2023

27 April 2023

Read more Inside Outsourcing here:

  1. The Outsourcing Week in Review (International): May 1, 2023
  2. The Outsourcing Week in Review (Mergers & Acquisitions): May 3, 2023

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About Derek Gallimore

Derek Gallimore has been in business for 20 years, outsourcing for over eight years, and has been living in Manila (the heart of global outsourcing) since 2014. Derek is the founder and CEO of Outsource Accelerator, and is regarded as a leading expert on all things outsourcing.