We’ve Created A New Policy To Not Lay Off Anyone Even If AI Replaces Their Job: Zerodha CEO

Companies around the world have already begun reorganizing roles in response to AI, but an Indian company — in usual fashion — is breaking away from the pack.

Zerodha has announced that it has instituted a new policy under which it will not fire any employees, even if their jobs can be replaced with AI. “We’ve just created an internal AI policy at Zerodha to give clarity to the team, given the AI/job loss anxiety,” Zerodha CEO Nithin Kamath said on Twitter. “This is our stance: “We will not fire anyone on the team just because we have implemented a new piece of technology that makes an earlier job redundant,” he added.

“With recent breakthroughs in AI, we finally think AI will take away jobs and can disrupt society,” Kamath added. “The current capitalistic and economic systems will rapidly adopt AI, accelerating inequality and loss of human agency. That’s the immediate risk,” Kamath added.

“In today’s capitalism, businesses prioritize shareholder value creation above stakeholders like employees, customers, vendors, the country, & the planet. Markets incentivize business leaders to prioritize profits over everything else; if not, shareholders vote them out,” Kamath continued.

Kamath said that AI could cause massive job losses around the world. “Many companies will likely let go of employees and blame it on AI. In the process, companies will earn more and make their shareholders wealthier, worsening wealth inequality. This isn’t a good outcome for humanity,” Kamath said.

Kamath said that while his company was taking steps to stem the AI onslaught, AI’s rise might ultimately be inevitable. “While the hope is for governments worldwide to put some guardrails, it may be unlikely given the deglobalization rhetoric. No country would want to sit idle while another becomes more powerful on the back of AI,” he said.

“It’ll take a few years for us to see the real impact of AI on humanity. Businesses with financial freedom should, if nothing else, give their teams that helped build the business time to adapt,” Kamath said. “I know some of this might sound weird coming from the CEO of a broking firm,” he concluded.

It’s an interesting stance — Zerodha says it’s willing to forego profits in order to help its employees tide over the disruption that AI will cause. But Zerodha has the freedom to execute such an initiative — it’s famously lean, employing only around 30 people in its tech team, and a further 1000 people in sales. Zerodha also made a profit of Rs. 2,094 crore last year, so it can afford to have some deadweight in its teams for the foreseeable future.

But while Zerodha’s stance might appear laudable, it might not be easy for other companies to follow suit. OpenAI CEO Sam Altman has said that programs like ChatGPT could eliminate many jobs, IBM has already stopped hiring for7,800 roles which it sees as being replaced by AI in the coming year. Education companies like Chegg have seen their stock prices plummet by as much as 40 percent because students are simply ChatGPT for their homework. Amidst all this, Zerodha’s policy of not firing employees because of AI might feel noble, but the company could discover that it’s often hard to stand against the inexorable march of technology for too long.