Behind the Buzz: The Truth About AI’s Capabilities and Its Job Impact

The idea that AI is rapidly eliminating jobs is an oversimplification. While the impact is real in some sectors, the transformative potential of AI does not automatically lead to mass unemployment. Most companies are still figuring out how to use AI effectively, and for many, the goal of reducing headcount remains more aspirational than reality.

Despite the excitement around AI, the tools getting the most attention often fall short in practice. The generative AI we hear about most, such as large language models (LLM) like ChatGPT, Gemini, and Claude, often doesn’t live up to executive expectations. These tools struggle with the messy complexity of real business workflows unless they’re heavily customized. And even then, the results tend to be modest, with only small reductions in headcount and a high cost in both time and money. According to OpenAI, the typical impact on employees has been relatively limited. The company’s report indicates that ChatGPT Enterprise users generally save between 40 and 60 minutes on days when they actively use the tool. While that’s a meaningful gain, it falls short of the transformative productivity boost some anticipated. Organizations that have incorporated AI have found that machine learning (ML) approaches are driving most of the tangible gains. These aren't simple chatbot systems, but statistical models built on large volumes of structured data.

Some major tech firms have publicly linked recent workforce reductions to AI. Amazon, for example, recently announced cuts of about 14,000 global corporate roles. Chegg, the online academic support platform, plans to reduce nearly half of its staff, citing the growing impact of AI on learning tools and shifts in how students search for educational resources. Even Nvidia, widely seen as a central player in the AI boom, has experienced market turbulence with stock declines reflecting uncertainty about how quickly AI investments will translate into profits. In turn, concerns about an AI-driven bubble have fueled broader market sell-offs. Still, analysts caution against attributing all job cuts to AI and point to economic cycles, pandemic-era overhiring, and strategic restructuring.

Many small businesses are adopting AI in a low-risk approach to support daily work. Rather than replacing employees, these tools assist with routine tasks like organizing information or drafting responses, helping staff focus on higher-value work. In most cases, AI comes built into the software they already use or helps them search and gather information faster. The time savings are modest and affect only small parts of the workday.

While there’s a lot of talk about AI taking jobs, in reality, most companies are still figuring out how to use it, and it’s not causing major changes to staffing. Want to retain your top employees? Consider a compensation plan to ensure you are keeping up with current pay practices in your industry and geographic location. Learn more about compensation plans here.