"We No Longer Need As Many People": Duolingo Fires 10% Of Contractors, Will Replace Them With AI

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by Tyler Durden
Wednesday, Jan 10, 2024 - 12:20 AM

It's what Goldman's head of TMT trading, Peter Callahan, calls the story of the day: almost a year after IBM said it would stop hiring for roles that can be replaced by AI, with Goldman estimating that some 300 million non-menial, highly paid workers could be made redundant thanks to AI (which will automate up to one-fourth of current work tasks)...

... overnight, Bloomberg reported that Duolingo, maker of language-learning software, is cutting 10% of contracted workers while using generative artificial intelligence to create more content, the latest sign that companies are handing off tasks typically handled by (paid) workers to (largely free) AI tools. It is, according to Callahan, one of the first “efficiency gains on the back of A.I” headlines that he recall seeing ("even if this is small in scope, it is a notable datapoint for the GenAI theme.")

"We just no longer need as many people to do the type of work some of these contractors were doing. Part of that could be attributed to AI,” a Duolingo spokesperson said, confirming that 10% of contractors were "offboarded."

Chief Executive Officer Luis von Ahn said in a November letter to shareholders that the company is using generative AI to produce “new content dramatically faster,” such as the scripts to shows that help teach languages. The company also uses AI to generate voices within the app and has introduced a premium tier, Duolingo Max, with AI-generated feedback and conversations in other languages.

Naturally, the market rewarded this announcement, pushing DUOL stock 3% higher after more than tripling in 2023. This, of course, guarantees that most publicly-traded companies will follow suit and fire all non-critical workers in coming months, sparking an avalanche of new layoffs and forcing the Fed to actively consider how the coming Universal Basic Income wave will be funded.

As Bloomberg notes, the intense interest in generative AI has led employee groups and unions to question whether businesses will use the technology as an excuse to reduce their workforce (spoiler alert: they will). A report published in April by the World Economic Forum estimated that AI would cause “significant labor-market disruption” over the next five years, though the net impact may be positive as employers seek workers with more technical skills to navigate the use of the technology. Actually, the net impact will be catastrophic and will lead to mass riots around the world and certainly in China where labor protests just hit a 7 year high in 2023.

Last month, Microsoft responded to those concerns and announced an alliance with the American Federation of Labor and Congress of Industrial Organizations, which is made up of 60 unions that represent 12.5 million workers, to train people about AI and look at how the technology may affect employment.

At an event announcing the partnership, Microsoft President Brad Smith said the goal is to bring industry and labor to the table to “enhance” the way people work.

“I can’t sit here and say that AI will never displace a job,” Smith said the event. “I don’t think that would be honest. AI is well-designed to accelerate and eliminate some of the parts of people’s jobs that you might consider to be drudgery.”

Translation: AI will displace millions of jobs... and since the large language models behind AI are trained using such leftist garbage as WaPo, NYT and Business Insider, the results will be nothing short of hilarious.