AI Service Industry: Titan or Titanic?
October 6, 2025
Venture capitalists believe they have a new recipe for success: Buy up managed-services providers and replace most of the staff with AI agents. So far, it seems to be working. (For the VCs, of course, not the human workers.) However, asserts TechCrunch, “The AI Services Transformation May Be Harder than VCs Think.” Reporter Connie Loizos throws cold water on investors’ hopes:
“But early warning signs suggest this whole services-industry metamorphosis may be more complicated than VCs anticipate. A recent study by researchers at Stanford Social Media Lab and BetterUp Labs that surveyed 1,150 full-time employees across industries found that 40% of those employees are having to shoulder more work because of what the researchers call ‘workslop’ — AI-generated work that appears polished but lacks substance, creating more work (and headaches) for colleagues. The trend is taking a toll on the organizations. Employees involved in the survey say they’re spending an average of nearly two hours dealing with each instance of workslop, including to first decipher it, then decide whether or not to send it back, and oftentimes just to fix it themselves. Based on those participants’ estimates of time spent, along with their self-reported salaries, the authors of the survey estimate that workslop carries an invisible tax of $186 per month per person. ‘For an organization of 10,000 workers, given the estimated prevalence of workslop . . . this yields over $9 million per year in lost productivity,’ they write in a new Harvard Business Review article.”
Surprise: compounding baloney produces more baloney. If companies implement the plan as designed, “workslop” will expand even as the humans who might catch it are sacked. But if firms keep on enough people to fix AI mistakes, they will not realize the promised profits. In that case, what is the point of the whole endeavor? Rather than upending an entire industry for no reason, maybe we should just leave service jobs to the humans that need them.
Cynthia Murrell, October 6, 2025
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