From the sofa office to your new AI boss: the Age of Zoom is over
In April 2020, with about half the world locked down, videostreaming website Vimeo was dealing with “unprecedented” demand, funnelling investment in customer support and technical infrastructure, and hosting virtual lunches for new hires. Three years on, revenue is in decline, its shares have slumped 93% since going public and it is slashing jobs. It is not alone.
More than 500,000 job cuts have been announced around the world since October, as tracked by Bloomberg, dominated by white-collar firms such as Vimeo. What began with a wave of layoffs among highprofile Big Tech companies is spreading. Consultants at McKinsey and KPMG are downsizing; companies such as FedEx and Boeing are cutting middle management and “bureaucracy”; weak banks such as Credit Suisse are being buried.
Such is life in a normal economy, one might say. With everything snapping back to prepandemic reality, from hours spent watching online videos to corporate takeover activity to interest rates, it is hardly a shock to see companies scrambling to restructure. “During the pandemic, everyone’s using video and what happens is you start to get a little bit of ‘shiny object syndrome’,” Vimeo CEO Anjali Sud recently told Forbes, saying the company now wants to focus on enterprise customers.
But that stands in fairly stark contrast with demand for bluecollar jobs, where a declining supply of older workers has kept labour markets tight. And it is surely the opposite of what one might have expected from the Age of Zoom, in which headsetand-keyboard-toting elites able to work remotely were set to leave less digitally literate elders in the dust. What is happening now is not exactly a white-collar “recession” — unemployment rates for professionals in the US are still in the low single-digits overall — but the Zoomocrats now seem to be first in line when the axe swings.
The question is whether this is a temporary phenomenon or something longer lasting. A fullblown recession might well distribute the pain more evenly. However, given disappointing recent trends in productivity, and where automation trends are heading in the era of ChatGPT, there is a real chance that this could be just the start.
While there was undoubtedly a life-saving shift to digital and remote work during Covid-19, productivity trends returned to prepandemic levels, or slightly below, according to a November paper co-authored by Stanford University’s Nicholas Bloom. An IMF discussion paper released last month suggests that pandemic digitisation led to a broad catch-up in adopting essential technologies, but not a boost for investments in anything more revolutionary. Countries such as digital laggard Portugal experienced a surge in digital employment, but tech-savvy Denmark did not see a sustained increase.
And while one might have expected a jump in job qualifications to go with a more connected world, the IMF paper does not find evidence of increased demand for digital skills in occupations.
It chimes with research last year finding “downskilling” rather than upskilling, as job requirements were relaxed during the labour supply crunch.
The “shiny object syndrome” mentioned by Vimeo’s Sud is revealing: the digital rush during Covid-19 opened up a deluge of short-term business opportunities that seemed too good to turn down, but which in the postpandemic world has ebbed away; hence, consultants who lecture CEOs on productivity are also having to cut back — to the chagrin of digital nomads who envisioned their office at the beach.
Unlike the productivity boom of the 1990s — the age of pagers, text-messaging and dial-up modems — the Age of Zoom so far has had a pretty incremental effect. “We don’t really see any major productivity gains,” says Nomura International economist George Moran.
Yet what Zoom has sowed, ChatGPT could reap. After bringing more jobs online without a corresponding jump in skills or investment in productive
innovation, ther risk is that white-collar work is now more vulnerable to disruption than before. Without slipping into dystopian visions of artificial intelligence (AI) run amok, a world where more cognitive tasks can be automated is a big deal for the office (remote or otherwise). Ask ChatGPT for advice on fixing a burst water pipe, however, and the reply includes: “It’s best to contact a licensed plumber who can help you with the repair.”
No wonder CEOs are excited about AI. Vimeo’s CEO recently told analysts that AI can automatically do cognitive and creative tasks such as make videos for customers, and added that generative AI is an area the company is looking at.
“Every month there are hundreds more job postings mentioning generative AI,” ZipRecruiter told the Wall Street Journal. Whether the tech itself is worth the hype or not, it too looks like a shiny object, one having white-collar workers quake on their sofas.