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Automation's Advocates in Downsizing Denial

It is time the industry faced up to the upheaval that automation will create.

Iain Morris

January 5, 2018

7 Min Read
Automation's Advocates in Downsizing Denial

Automation is simultaneously the most important buzzword of the day and a taboo subject. At industry conferences, speakers shout it from the stage, trumpeting their technological proficiency and ambition. But link it in any way to layoffs and executives usually go silent, like a malfunctioning bit of voice recognition software. (See The Automation Taboo: Let's Talk About Jobs.)

Automation's dictionary definition makes this paradox seem all the more absurd. According to Merriam-Webster, it is the "automatically controlled operation of an apparatus, process or system by mechanical or electronic devices that take the place of human labor." In other words, the very purpose of automation is to get rid of manual effort and all of its attendant costs. Without reference to its impact on the workforce, any talk of automation is misleading.

The transgression is explicable, though, and not confined to the telecom sector. Companies in all industries now model themselves on Silicon Valley's tech overlords, whose highly automated businesses have become the world's most valuable firms. Yet the mere suggestion that jobs might disappear can trigger panic among employees and investors.

Figure 1: AlphaGo versus Alpha Male In a potential sign of technology's threat to humanity, Google's AlphaGo AI famously beat Lee Sedol, one of the world's best Go players, during a contest in March 2016. (Source: flickr/Buster Benson) In a potential sign of technology's threat to humanity, Google's AlphaGo AI famously beat Lee Sedol, one of the world's best Go players, during a contest in March 2016. (Source: flickr/Buster Benson)

Indeed, the telecom operator's instinct is to remain tight-lipped about job cuts whenever possible. AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) quietly cut about 42,250 jobs between December 2015 and September last year, a figure that represents about 9.2% of their combined workforce at the end of 2015. In a pre-Christmas, classic display of PR subterfuge, AT&T blew its horn about employee bonus payments at the same time it was making further cuts, hoping to muffle any wintry murmurings about layoffs as reporters blazed toward the finishing line of publication. (See Efficiency Drive by Major Telcos Has Claimed 74K Jobs Since 2015.)

Desperate to reconcile this apparent conflict, the advocates of automation have tried to play down anxiety about unemployment. Automation will inevitably destroy some jobs, they freely admit, but it will also create new ones in their place. Anyone who doubts this need only refer back to earlier technology-fueled upheavals. While machines have hollowed out industries such as farming and coal mining, they have supported the growth of the services sector, for instance. Overall unemployment has not mushroomed as technologies have spread.

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But history is not bound to repeat itself, and there are good reasons to expect a paradigm shift. In Homo Deus, his meditation on the future, author Yuval Noah Harari notes that human abilities fall into two broad categories -- the cognitive and the physical. As machines claimed manual, "blue-collar" occupations, people had to focus on jobs requiring cognitive skills that computers have lacked. The suddenly rapid development of artificial intelligence (AI) now threatens most -- if not all -- of these "white collar" roles. Once AI can "out-think" us, what conceivable opportunities can there possibly be for humans? (See The Revolution Will Be Automated .)

The success of Google's AlphaGo AI system is a worrying harbinger. Engineered to play the highly complex Chinese board game of Go, the first version of AlphaGo overcame South Korea's Lee Sedol, one of the world's best players, during a contest in 2016, losing just one of the five games played. AlphaGo Plus, an update that came out last year, appears unbeatable. What is particularly alarming for homo sapiens is that AlphaGo Plus was not even taught by human software developers to play Go. It learned the game all by itself, and its unorthodox and strangely creative style of play has astonished the Go experts. (See AI Threat Is Tech's Fart in the Room.)

Optimism that AI will never be able to fill the most creative jobs as effectively as people seems misplaced. David Cope, a musicology professor at the University of California, has built software programs that compose music, writes Harari in Homo Deus. One mimics the styles of great composers such as Bach, Beethoven and Chopin. Most listeners mistakenly identified its compositions as the real Bach when they were performed during a concert that also featured original music from the Baroque composer as well as a contemporary musician called Steve Larson. Unaware of its provenance, classical music fans have described the machine-written stuff as "soulful," says Harari. And a newer software program called Annie is even more inspired, composing music in its own unique style.

Next page: The workforce cull

The workforce cull
Even if jobs besides Larry Page's and Marc Zuckerberg's remain off-limits to AI, some industries will inevitably suffer a greater loss of employees than others. Because telecom is sometimes in the technology vanguard, and seems ahead of most other sectors on digital transformation, many of its existing workers might expect to remain relevant. Yet telecom is also replete with legacy systems that automation could help to phase out. Workers will go with them.

Outside those areas, moreover, telecom organizations are still awash with analog jobs. Positions in call centers and high-street stores will fast disappear as operators continue to invest in AI-based customer care systems and online sales channels. Network engineers and operations staff will survive for longer. But obsolescence ultimately awaits them, too. More upfront than most operators, Germany's Deutsche Telekom AG (NYSE: DT) now talks of "brutal automation" and looks forward to the day when it can run networks with "no human involvement." (See DT: Brutal Automation Is Only Way to Succeed, 'Brutal' Automation & the Looming Workforce Cull and Chatbot Takes Charge: Vodafone's Customer Services Overhaul.)

If all this sounds unremittingly bleak, the industry is in dire need of a rude awakening. Before AI takes charge, automation will release employees for tasks that machines cannot perform, goes the argument. But unless operators are willing to make do with zero growth in profits, a staff redeployment -- as opposed to a staff reduction -- can happen only if those tasks buoy sales. In developed markets, operators have not reported any meaningful organic increase in service revenues for several years. Does anybody seriously expect this to change with the arrival of 5G? In all likelihood, operators will be hard pressed simply to defend their remaining business from Silicon Valley's masters of the universe.

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Light Reading.

Any market observer's wish list for 2018 should include the demand for a full and frank discussion about automation and its impact, in the context of the business challenges that operators face. Uncomfortable as that may be, it is surely better than peddling the fallacy that automation will not wield a heavy scythe. If nothing else, players must realize that many stakeholders will not buy into automation unless they have the complete picture. After all, failure to explain accurately the purpose and benefits of virtualization was once blamed for managerial misgivings about that technology. And downplaying the connection between automation and job cuts could prove counterproductive. For one thing, investors may continue to fret that any layoffs are a sign of struggles. (See Stop "Overselling" SDN, Orange Tells Vendors.)

Lurking in the corridors of the industry, automation looks poised to change it beyond recognition, as super-intelligent algorithms replace people in all parts of the operator organization. The sooner the industry starts an open discussion about that process in all of its ugly details, the better prepared it will be for the ensuing upheaval.

— Iain Morris, News Editor, Light Reading

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About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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