The issue of layoffs to make way for AI has also arrived in Italy and presents itself in its worst form: not a downsizing of staff but the definitive closure of an entire company. This is happening in Marghera, Venice, where the branch of the American group Investcloud, a fintech specialized in developing software and platforms for wealth management, will close its doors precisely because it intends to invest in Artificial Intelligence.
IN THE USA IT IS NORMAL TO LAY OFF TO MAKE WAY FOR AI
Although in the mainstream media in recent days there has been a spread of the news, actually false, of a first ruling that would have admitted the legality of layoffs to make way for AI, the Venetian case is currently unique in the Italian landscape. Not so in the USA, where Big Tech companies are laying off extensively (and indeed the numbers weigh on employment statistics) despite record profits to maximize margins. There are also those, like Salesforce CEO Marc Benioff, who during an interview on the podcast The Logan Bartlett Show commenting on the news of laying off 4,000 employees and the arrival of Artificial Intelligence in his company candidly admitted that fewer people will be needed from now on.
WHAT INVESTCLOUD DOES
With the closure of Investcloud’s Italian branch (opened after the acquisition of former Finantix in 2021), active in the Digital Wealth business, all its 37 employees will be laid off, as the company communicated to Federmeccanica, unions, and Confindustria Veneto Est announcing the closure to make way for the launch of an operating model based on systems integrated with artificial intelligence which, as a side effect, “does not foresee the maintenance of autonomous local structures.”
IF AI ENTERS, THE HUMAN EMPLOYEE IS NOT NEEDED
The race towards artificial intelligence, without beating around the bush, allows management to overcome “The historical ‘tailor-made’ model, organized in teams spread across multiple jurisdictions and engaged in local adaptations.” The bespoke work, instead of being seen as a value, is now viewed by overseas management as a sacrificable cost that “has caused operational duplications, reduced economies of scale, longer development times, and only partial valorization of the benefits in terms of productivity and automation deriving from artificial intelligence.”
The Italian company, in particular, being focused on Digital Wealth (marked by “a significant acceleration of technological changes, with a growing level of integration of AI-based solutions in service models for wealth management”) appears to US managers as redundant and therefore sacrificable on the altar of cuts.
Indeed, InvestCloud speaks of the need for a “structural realignment,” with the choice to focus on a few global centers of excellence and a strategy based on an “acceleration of investments in AI-based solutions and a strengthening of attention to replicable and scalable innovation.”
POLITECNICO: WITH AI 50 PERCENT OF JOBS AT RISK
Being the first case in Italy, there are no specific laws to protect employees, who upon learning the news today will gather in an assembly. For this reason, unions are asking for “new regulations to curb a phenomenon that risks spreading throughout the ICT sector,” as said by Fim Cisl secretary Matteo Masiero to the media. In reality, contrary to what worker representatives denounce, ICT is not the only sector at risk of staff reductions. According to the alarm launched by the Politecnico di Milano Observatory, by 2033 AI will impact 3.8 million equivalent jobs.
“Currently, about 50% of equivalent jobs in Italy could theoretically be automated, but so far only a small part of this potential has actually been realized. By 2033, however, it is estimated that 18% of equivalent jobs could actually be automated, performing the work of about 3.8 million people in Italy,” reads the latest report. These estimates are no longer just on paper but are beginning to take three-dimensional shape in concrete cases before which lawmakers must not remain inactive and powerless.
