In Silicon Valley boardrooms, artificial intelligence is being hailed as the ultimate business solution, a cost-saving machine that does not strike, does not sleep, and does not ask for a raise.
Ironically, some of the strongest warnings have come from the very people building these tools.
Sam Altman, CEO of OpenAI, has repeatedly acknowledged that AI will likely displace millions of jobs. But rather than using that insight to advocate for restraint, it is being used to normalise mass layoffs.
Sebastian Siemiatkowski, CEO of a global fintech company, replaced a large portion of his customer service team with AI. Within months, customer dissatisfaction soared and quarterly losses doubled.
He later admitted that cost unfortunately became too predominant in decision making, leading to lower quality.
Yet by then, 40% of the staff had already been let go. Meanwhile, in places such as Mdantsane and Mthatha, thousands of qualified young people remain locked out of the economy. Not because they lack skill or ambition, but because they are being systematically replaced.
According to Stats SA’s Quarterly Labour Force Survey, SA’s official unemployment rate in the first quarter of 2025 climbed to 32.9%.
The expanded definition, which includes discouraged job seekers, reached 43.1%.
Youth unemployment stands at a staggering 46.1%, and in the Eastern Cape, the official rate has reached 39.3%, among the highest in the country.
In this context, the global trend of CEOs embracing AI to eliminate staff is not only reckless, it is economically unsustainable.
Business leaders are now openly celebrating job cuts, citing AI as the more compliant, scalable alternative to human labour.
But this approach overlooks a simple truth: an economy cannot survive when too few people are earning, spending, and participating. Any functioning economy relies on a balance between production and consumption.
The moment you remove the consumers, the workers whose salaries support demand, the entire system begins to collapse.
What may begin as an operational efficiency quickly turns into an economic contraction.
It is no coincidence that inequality in SA remains among the highest in the world. A Gini-coefficient of over 63 reflects the structural exclusion of millions from productive participation.
Concentrated income at the top means limited local spending and weak domestic markets.
If AI adoption is pursued without strategic foresight, it will only widen this gap, undermining demand further and making recovery impossible.
In August 2024, the department of communications & digital technologies released a draft National Artificial Intelligence Policy Framework.
It called for ethical, inclusive, and human-centred AI. The document emphasised the need for infrastructure, transparency, and workforce preparation.
However, the framework remains just that, a draft. There is no binding legislation guiding AI deployment in the workplace.
Labour law, data protection law, and even our competition policy have yet to meaningfully account for the scale and speed of this shift.
In the absence of regulation, firms will continue to adopt AI purely for labour substitution, with no incentive to upskill or retain staff.
Business and government must act urgently. The following five actions offer a path forward that does not sacrifice people for progress:
- Invest in human capital companies, treating AI as a multiplier: This includes retraining programmes, AI literacy workshops, and on-the-job learning that links human insight with machine efficiency.
- Legislate responsible AI adoption: The draft AI policy must be converted into clear regulation. Companies should be required to report on how AI affects employment and what measures are in place to protect and transition affected workers.
- Incentivise inclusive innovation: The Technology Innovation Agency and other public funders must prioritise projects that create new roles and markets. AI systems that eliminate jobs should not receive public support unless accompanied by a plan for reintegration.
- Protect consumer demand: Wage subsidies, youth employment incentives, and support for small business must form part of a macroeconomic response to automation.
- Hold leadership accountable: CEOs should be accountable not only for shareholder value, but for the societal impact of their decisions. Trade unions, civil society, and the media must continue to interrogate business practices that harm national cohesion under the guise of innovation.
Ultimately, SA cannot afford to pursue a model of artificial intelligence adoption that prioritises short-term operational savings over long-term economic resilience.
An inclusive, human-centred approach is essential, especially for a country already facing structural unemployment, deepening inequality, and declining consumer demand.
Business leaders must recognise that without a population meaningfully engaged in the economy, there is no market to sustain their operations.
This is not an argument against AI. It is an argument against deploying it without policy alignment, human development, and national interest in mind.
Chuma Memela, AI consultant & managing director at Genie-yus AI
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