Billionaire tech CEO says bosses shouldn’t ‘BS’ employees about the impact AI will have on jobs

Published

2 months ago

September 19, 2024

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Corporate leaders can’t “bulls—” their employees about the impact of artificial intelligence on the workforce and the ways in which the technology will affect jobs more broadly, according to one tech billionaire.

Jim Kavanaugh, the CEO of World Wide Technology (WWT), told CNBC that people are “too smart” to accept that AI won’t change the way that they manage their work and that no jobs will be eliminated due to the transformative nature of the technology.

WWT is an enterprise technology solutions provider that focuses on services such as cloud computing, IT security, data analytics, artificial intelligence, and consulting services.

“If you think you’re going to try to game this, and that you’re going to tell employees nothing’s going to change, and everything’s going to be fine, that’s just BS,” Kavanaugh said in an interview last week.

Kavanaugh noted that, though there is no playbook for how business leaders should communicate disruptive macroeconomic events, such as the Covid-19 pandemic and its impact on jobs, the job of a CEO is “to be as transparent as possible and always honest with their employees about where they stand.”

With AI, “there’s going to be all kinds of changes,” Kavanaugh added. “If I could give any advice, it’s that everybody should be a student of AI and tech and not be afraid of it.”

Even though it’s a given AI will impact the workforce, “none of us have it all completely figured out,” he said. “If anybody comes in and tells you, ‘I can tell you exactly how this is going to impact jobs and how it’s going to impact everything we’re doing,’ they’re lying. Because nobody knows.”

Kavanaugh stressed that, overall, he’s an optimist when it comes to AI’s positive impacts and its ability to improve productivity.

“Sitting there and saying, ‘I’m going to try to throw cold water on this fire, I’m going to try to put it out and ignore it,’ that’s a complete mistake.”

“I believe in embracing [AI] and learning and being realistic about it. Because there will be jobs that will be disrupted, there’s no question about that. But, for the most part, I truly believe it will be an enhancer and an accelerator of what we’re all doing,” Kavanaugh told CNBC.

Kavanaugh co-founded WWT in 1990 with fellow St. Louis, Missouri-based entrepreneur David Steward as a reseller of technology equipment. Today, WWT is a tech giant in its own right, generating revenues of $20 billion annually.

Kavanaugh currently has a net worth of $7 billion, according to real-time data from business news magazine Forbes. Prior to co-founding the company, Kavanaugh represented the U.S. national soccer team in the 1984 Summer Olympics in Los Angeles.

Is AI a job destroyer, or job creator?

The paper further noted that, in the U.S. and Europe, “roughly two-thirds of current jobs are exposed to some degree of AI automation,” while generative AI “could substitute up to one-fourth of current work.”

Kavanaugh’s not the only one who sees positive effects stemming from the use of AI in the world of work. Clara Shih, Salesforce’s head of AI, told CNBC that there are jobs that will disappear due to the disruptive impact of the technology.

Whether new technology will replace jobs is “a question that’s been asked throughout time,” Shih said, referring to the creation of automation tools in factories, farming vehicles and machinery, and the internet as examples.

“There are a subset of jobs that are going to go away,” Shih said. “The internet destroyed a lot of jobs. But then it created brand new ones that we couldn’t have even imagined in 1999.”

Ultimately, AI will be a positive force in the world of work, leading to new jobs, according to Shih. However, what our job descriptions look like might change.

“I think what we’re seeing today with AI is that everyone needs a new job description,” Shih said. “Most jobs are not going to go away, but every job is going to require a new job description.”

Last week, as part of its annual Dreamforce event, Salesforce unveiled a new AI platform, called AgentForce. Companies can use the platform to build and customize their own AI “agents,” autonomous digital workers that can help with things like customer service and employee support.

Some companies have even been actively touting the benefits of AI in reducing their overall personnel needs. For example, Swedish fintech firm Klarna said last month that it was able to slash its workforce from 5,000 to 3,800 in a single year thanks to AI, and then pay its remaining workers more.

The “buy now, pay later” pioneer told the BBC it is looking to further reduce employee numbers next year, to 2,000 people, through the use of AI in areas like marketing and customer service.

Technology

Intuit shares drop as quarterly forecast misses estimates due to delayed revenue

Published

11 hours ago

November 21, 2024

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Intuit shares drop as quarterly forecast misses estimates due to delayed revenue

Intuit CEO Sasan Goodarzi speaks at the opening night of the Intuit Dome in Los Angeles on Aug. 15, 2024.

Rodin Eckenroth | Filmmagic | Getty Images

Intuit shares fell 6% in extended trading Thursday after the finance software maker issued a revenue forecast for the current quarter that trailed analysts’ estimates due to some sales being delayed.

Here’s how the company performed in comparison with LSEG consensus:

Earnings per share: $2.50 adjusted vs. $2.35 expected
Revenue: $3.28 billion vs. $3.14 billion

Revenue increased 10% year over year in the quarter, which ended Oct. 31, according to a statement. Net income fell to $197 million, or 70 cents per share, from $241 million, or 85 cents per share, a year ago.

While results for the fiscal first quarter topped estimates, second-quarter guidance was light. Intuit said it anticipates a single-digit decline in revenue from the consumer segment because of promotional changes for the TurboTax desktop software in retail environments. While that will affect revenue timing, it won’t have any impact on the full 2025 fiscal year.

Intuit called for second-quarter earnings of $2.55 to $2.61 per share, with $3.81 billion to $3.85 billion in revenue. The consensus from LSEG was $3.20 per share and $3.87 billion in revenue.

For the full year, Intuit expects $19.16 to $19.36 in adjusted earnings per share on $18.16 billion to $18.35 billion in revenue. That implies revenue growth of between 12% and 13%. Analysts polled by LSEG were looking for $19.33 in adjusted earnings per share and $18.26 billion in revenue.

Revenue from Intuit’s global business solutions group came in at $2.5 billion in the first quarter. The figure was up 9% and in line with estimates, according to StreetAccount. Formerly known as the small business and self-employed segment, the group includes Mailchimp, QuickBooks, small business financing and merchant payment processing.

“We are seeing good progress serving mid-market customers in MailChimp, but are seeing higher churn from smaller customers,” Sandeep Aujla, Intuit’s finance chief, said on a conference call with analysts. “We are addressing this by making product enhancements and driving feature discoverability and adoption to improve first-time use and customer retention.”

Better outcomes are a few quarters away, Aujla said.

CreditKarma revenue came in at $524 million, above StreetAccount’s $430 million consensus.

At Thursday’s close, Intuit shares were up about 9% so far in 2024, while the S&P 500 has gained almost 25% in the same period.

On Tuesday Intuit shares slipped 5% after The Washington Post said President-elect Donald Trump’s proposed “Department of Government Efficiency” had discussed developing a mobile app for federal income tax filing. But a mobile app for submitting returns from Intuit is “already available to all Americans,” CEO Sasan Goodarzi told CNBC’s Jon Fortt.

Goodarzi said on CNBC that he’s personally communicating with leaders of the incoming presidential administration.

On the earnings call, Goodarzi sounded optimistic about the economy.

“Our belief, which is not baked into our guidance, is that we will see an improved environment as we look ahead in 2025, particularly just with some of the things that I mentioned earlier around just interest rates, jobs, the regulatory environment,” he said. “These things have a real burden on businesses. And we believe that a better future is to come.”

WATCH: H&R Block, Intuit shares fall after report Trump administration is considering a free tax-filing app

H&R Block, Intuit shares fall after report Trump admin considering a free tax-filing app

Technology

Bluesky CEO Jay Graber says X rival is ‘billionaire proof’

Published

14 hours ago

November 21, 2024

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Bluesky CEO Jay Graber says X rival is 'billionaire proof'

Bluesky has surged in popularity since the presidential election earlier this month, suddenly becoming a competitor to Elon Musk’s X and Meta’s Threads. But CEO Jay Graber has some cautionary words for potential acquirers: Bluesky is “billionaire proof.”

In an interview on Thursday with CNBC’s “Money Movers,” Graber said Bluesky’s open design is intended to give users the option of leaving the service with all of their followers, which could thwart potential acquisition efforts.

“The billionaire proof is in the way everything is designed, and so if someone bought or if the Bluesky company went down, everything is open source,” Graber said. “What happened to Twitter couldn’t happen to us in the same ways, because you would always have the option to immediately move without having to start over.”

Graber was referring to the way millions of users left Twitter, now X, after Musk purchased the company in 2022. Bluesky now has over 21 million users, still dwarfed by X and Threads, which Facebook’s parent debuted in July 2023.

X and Meta didn’t immediately respond to requests for comment.

Threads has roughly 275 million monthly users, Meta CEO Mark Zuckerberg said in October. Although Musk said in May that X has 600 million monthly users, market intelligence firm Sensor Tower estimates 318 million monthly users as of October.

Bluesky was created in 2019 as an internal Twitter project during Jack Dorsey’s second stint as CEO, and became an independent public benefit corporation in 2022. In May of this year, Dorsey said he is no longer a member of Bluesky’s board.

“In 2019, Jack had a vision for something better for social media, and so that’s why he chose me to build this, and we’re really thankful for him for setting this up, and we’ve continued to carry this out,” said Graber, who previously founded Happening, a social network focused on events. “We’re building an open-source social network that anyone can take into their own hands and build on, and it’s something that is radically different from anything that’s been done in social media before. Nobody’s been this open, this transparent and put this much control in the users hands.”

Part of Bluesky’s business plan involves offering subscriptions that would let users access special features, Graber noted. She also said that Bluesky will add more services for third-party coders as part of the startup’s “developer ecosystem.”

Graber said Bluesky has ruled out the possibility of letting advertisers send algorithmically recommended ads to users.

“There’s a lot on the road map, and I’ll tell you what we’re not going to do for monetization,” Graber said. “We’re not going to build an algorithm that just shoves ads at you, locking users in. That’s not our model.”

Bluesky has previously experienced major growth spurts. In September, it added 2 million users following X’s suspension in Brazil over content moderation policy violations in the country and related legal matters.

In October, Bluesky announced that it raised $15 million in a funding round led by Blockchain Capital. The company has raised a total of $36 million, according to Pitchbook.

Technology

Alphabet shares slide 6% following DOJ push for Google to divest Chrome

Published

15 hours ago

November 21, 2024

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Alphabet shares slide 6% following DOJ push for Google to divest Chrome

Jaque Silva | Nurphoto | Getty Images

Alphabet shares slid 6% Thursday, following news that the Department of Justice is calling for Google to divest its Chrome browser to put an end to its search monopoly.

The proposed break-up would, according to the DOJ in its Wednesday filing, “permanently stop Google’s control of this critical search access point and allow rival search engines the ability to access the browser that for many users is a gateway to the internet.”

This development is the latest in a years-long, bipartisan antitrust case that found in an August ruling that the search giant held an illegal monopoly in both search and text advertising, violating Section 2 of the Sherman Act.

The potential break-up would include preventing Google from entering into exclusionary agreements with competitors like Apple and Samsung, part of a set of remedies that would last 10 years.

CNBC’s Jennifer Elias contributed to this report.