Duolingo Inc., the renowned language-learning software provider, has opted to trim its contractor base by 10% while embracing generative artificial intelligence (AI) to amplify content production. This development highlights the evolving trend where companies are progressively delegating certain tasks traditionally carried out by human workers to AI-driven tools.
According to a company spokesperson, around 10% of contractors have been "offboarded" as a result of the shift in strategy. "We just no longer need as many people to do the type of work some of these contractors were doing. Part of that could be attributed to AI," stated the spokesperson on Monday.
Duolingo's CEO, Luis von Ahn, articulated in a November letter to shareholders that the incorporation of generative AI technology enables the company to generate "new content dramatically faster." This includes the creation of scripts for language-teaching shows and the implementation of AI-generated voices within the app. Furthermore, Duolingo introduced a premium tier, Duolingo Max, featuring AI-generated feedback and multilingual conversations.
The market responded positively to Duolingo's strategic move, with the company's shares surging by 3.2% to $210.65 at 2:16 p.m. in New York, following a remarkable threefold increase in 2023.
Contrary to concerns about AI completely replacing human roles, the spokesperson clarified that the reduction in the contractor workforce is not a "straight replacement" with AI. Many full-time employees and contractors at Duolingo actively utilize AI in their work. The company had 600 full-time workers at the end of 2022, as per company filings, and the spokesperson assured that no full-time employees were impacted by the recent cutback.
The adoption of generative AI in various industries has prompted discussions among employee groups and unions about potential workforce displacement. A report by the World Economic Forum in April projected "significant labor-market disruption" due to AI over the next five years. Microsoft Corp. recently announced an alliance with the American Federation of Labor and Congress of Industrial Organizations to address these concerns and enhance workforce skills related to AI.
Despite the ongoing debate, companies like Chegg Inc. and International Business Machines Corp. have also embraced AI, with Chegg incorporating AI into its tutoring services and IBM contemplating a pause in hiring for roles that could be automated by AI in the coming years.