Check out Part 1 of this blog post, published one year ago today, on what defines a “surplus elite,” a term popularized by the All-In Podcast, and how the cultural changes in white-collar work continue to shape the economic landscape, particularly in the technology arena as AI investments continue to mushroom around the globe.

“He who has the gold makes the rules.”

Just over 45 days into 2024, white-collar layoffs dominate the headlines at Google, Amazon, UPS, and many other big and small companies. The cost-cutting measures that began last year continue as inflation, high-interest rates, and lack of access to capital continue. Profitability is in vogue, and yesteryear’s growth at any cost strategies are disappearing in the rearview mirror for many of these companies, along with DEI, ESG, and remote work strategies popularized in 2020.

In late 2022 and early 2023, the rise of ChatGPT came into the fold of mainstream society, making it known that AI can create an impact by helping improve a company’s operational efficiencies to drive top-and bottom-line growth. Now, throw in outside economic forces that arguably started because of the arcane rules set forth by the pandemic; everything is coming to roost for employers, their balance sheets, and shareholders.

AI To The Rescue

Now, well over a year since ChatGPT came into existence, many business owners sitting on the sidelines are jumping into the game and reconsidering investments in AI and the possibility of using off-shore resources to become competitive in their respective industries to:

  • Lower labor costs
  • Improve margins
  • Enhance efficiencies through automation

It’s do or die for many of these businesses. As the gravy train of easy money evaporated, it came time for these highly educated and costly white-collar workers to prove their worth. And when they didn’t, they were laid off in the process. Employers are stuck bridging the shortfall of productivity while, at the same time, mitigating the most significant expense of any company known to man-labor.

Blue-Collar Vs. White-Collar Workers

Off-shoring and automation killed many of these blue-collar jobs a few decades back. Cities and towns catering to blue-collar industries shut down, leading to epic demises and ruining lives. Now, in a cruel twist of fate, these once-maligned,“low-skilled” jobs are experiencing a comeback. Will white-collar workers experience the same demise?

Manufacturing, retail, and hospitality – industries, where jobs don’t typically require a college degree, are experiencing cripplinglabor shortages and are now turning to AI-powered technologies, like robots and software tools, to bridge the gap. Doing so ensures that they attain (or retain) their competitive edge in their respective vertical.

Is it time for white-collar employers to do the same?

What’s Old, Is New Again

Cutting costs, implementing new technology, and off-shoring are familiar concepts. Imagine if companies still didn’t use the internet to run their businesses, which was common in the nineties. Investments in AI and off-shoring, lower-level, non-customer-facing roles can significantly contribute to a company’s profitability.

AI technologies cannot operate on their own. In the US, where companies are losing their grip on work-from-home mandates, they turn to off-shore help. If employees living 10 miles from work don’t want to return to the office, employers realize that their jobs could easily be off-shored, which translates to significant savings.

As this article goes to press, the current employment rate is 3.7%. It’s not all bad, as the media or LinkedIn claim. In the white-collar world, particularly in tech, employers now realize it is a borderless workforce. They have options at their disposal to thrive in this chaotic climate.

Will our team write part 3 of Can AI Replace The Surplus Elites on February 19, 2025? Time will tell. Whether it’s a lemonade stand, start-up, or billion-dollar, publicly traded company, running a profitable business is essential. It’s time for these companies to adapt and overcome to succeed in 2024 and beyond.