In 2024, buy-now-pay-later company Klarna announced it would cut hundreds of customer service roles and use an AI chatbot instead, expecting to save millions. A year later, after customer complaints about degraded service, Klarna quietly began recruiting human agents again. However, instead of full-time employees, it brought on gig workers in what CEO Sebastian Siemiatkowski described as an "Uber type of set-up." The AI chatbot handles basic queries, while gig workers manage advanced ones. "Just like somebody can go and drive an Uber for a while, they can actually jump on and work for Klarna's customer service," Siemiatkowski said.
AI's Impact on Employment
This scenario offers a glimpse into how artificial intelligence may transform work. While labor economists disagree on how much AI will replace jobs, they largely agree that AI will replace parts of most jobs. The optimistic view is that AI will take over menial tasks, freeing workers for higher-level work. The cynical view is that companies will use AI to hire fewer full-time employees, shifting toward a fragmented workforce resembling the gig economy.
Gig work refers to flexible, short-term, or on-demand work, originally from the music industry. It now describes workers on platforms like Uber, DoorDash, or Taskrabbit. These jobs offer autonomy but lack benefits such as paid time off, health insurance, workers' compensation, overtime, or even a minimum wage.
"One of the things we talk about as sociologists who study work is this idea about work moving from the career to the job to the gig. And AI makes it even easier to do that," says Alexandrea Ravenelle, a sociologist at the University of North Carolina at Chapel Hill and author of Hustle and Gig. For the last decade, gig work was primarily for rideshare drivers and couriers, but now many industries are outsourcing parts of jobs to technology to cut costs by hiring contractors instead of full-time employees.
This transformation is hitting white-collar desk workers hardest as companies strive to show efficiency gains from AI. "There's no evidence that jobs go away, but there is a lot of evidence that as soon as you can dismantle full-time employment, companies will do that," says Mary Gray, senior principal researcher at Microsoft Research and author of Ghost Work. Technology enables this, but companies mainly do it to save costs.
"We are going to see it in every industry," Ravenelle adds. "I don't believe there's any industry that's safe from this."
The Reality of Gig Work
Fifteen years ago, gig companies like Uber, DoorDash, and Instacart promised freedom and flexibility. Workers could become their own bosses, set their own schedules, and sometimes earn more. But the reality has been precarious arrangements with unstable pay, unpredictable hours, and nonexistent protections. A recent Human Rights Watch report details how gig work strips workers of basic protections like minimum wage, workers' compensation, paid sick leave, or control over hours, while platforms exert immense control via algorithms.
Several delivery workers in the report described getting into car accidents and having to pay medical bills themselves due to lack of workers' compensation. Others reported long, unpaid hours waiting for customers or orders, with up to half their time going unpaid.
Lena Simet, senior adviser on economic justice at Human Rights Watch and co-author of the report, says these are warnings for the broader workforce. "What we're seeing in gig work is in some ways the first indication of something broader. So many jobs could be 'gigified'. I totally see this as a foreshadowing of what we may see in many parts of the labor market."
Some data suggests this future has arrived: a recent Upwork survey found that about 60 million Americans (39% of the workforce) already perform freelance or gig work. Statista projects that number will jump to 86 million (about half the workforce) by 2027. The fastest-growing segment is knowledge workers: customer service agents, copywriters, financial analysts, paralegals, writers, and coders.
Once workers are classified as contractors rather than employees, "you have the rolling back of generations of hard-won workplace protections," says Ravenelle. "Literally stuff that our great-grandparents died for, all of those protections are gone."
When Gig Work Is the Only Option
An increasing number of workers are in such arrangements, sometimes due to AI adoption. Last month, Ravenelle published a study on creative workers like actors, writers, photographers, dancers, musicians, producers, and costume designers. Some felt insulated from AI, but many were forced into "hired gun" work, including training AI systems.
One musician in the study worked as an "algorithmic composer," manufacturing musical loops to train AI systems that could replace human musicians. A writer took a short-term gig evaluating AI-generated writing for a tech company, acknowledging the irony: "This is the best opportunity right now for me. And if you can think of something better, let me know."
An actor described taking a gig with a streaming giant that would reduce the need for background actors. He felt morally conflicted: "I feel like the construction worker laying the bricks for the gas chambers." But without other options, he said, "Not only is AI taking over the world, but I'm also dirt poor, so I may as well just go along with it."
Workers often join the gig economy because it's the best option in a precarious labor market. In a market upended by AI, people are turning to gig jobs again. Mercor, an AI data training startup, hired over 30,000 contractors in 2025 to train AI, including highly credentialed workers like doctors, lawyers, and bankers.
Nurses are also facing increased "gigification." Some hospitals have outsourced work to AI-powered platforms like ShiftMed, CareRev, and Clipboard Health, described as "Uber for nursing." Nurses report lower wages, competition for shifts, and having to bring their own equipment. One nurse described it as her best option: "I have no choice."
These platforms have sought exemption from regulations, succeeding in at least 17 states that recognize them as "healthcare worker platforms" rather than staffing agencies, exempting them from worker protections. Many have reached billion-dollar valuations.
A Narrowing Window for Pushback
Some workers have responded with unionization. In March, California healthcare workers struck against Kaiser Permanente's use of AI and outsourcing. In May, IT workers at the University of California voted to unionize, citing AI concerns. Max Belasco, a UCLA business systems analyst, says AI was "a major component of why we decided to organize," adding that workers want strategic implementation, not just cost-cutting.
But comprehensive policy at state, federal, and international levels is needed. Gray suggests universal benefits like healthcare or basic income. Other ideas include a global treaty from the UN's International Labour Organization to establish standards on wages and safety.
Simet believes now is the time to pass greater protections before it's too late. Governments have been too cautious, catering to companies' claims that they cannot operate with greater protections. "It's still a very lucrative labor model even if you have to comply with some regulations," Simet says. "And if this business model can only persist when exploiting workers, then maybe it shouldn't exist."
