In 2024, buy-now-pay-later company Klarna announced it would cut hundreds of customer service positions and replace them with an AI chatbot, a move expected to save the company millions. A year later, after customers complained about declining service quality, Klarna quietly began rehiring human customer service agents. At first glance, this seemed like a win for workers in the age of AI.

The reality, however, is more complicated. Rather than bringing back full-time employees, Klarna hired workers under what its CEO, Sebastian Siemiatkowski, has described as an “Uber-style model.” An AI chatbot continues to handle the bulk of routine customer inquiries, while a growing pool of gig workers manages the more complex ones. “Just like someone can drive for Uber for a bit, they can actually join and work in Klarna’s customer service,” Siemiatkowski said on a podcast in February.

AI and the Uber Model

According to the Guardian, this is a glimpse of one of the ways AI is poised to reshape work. While labor economists remain divided on whether AI will eliminate jobs outright, there is broad agreement that it will take over portions of most jobs. The optimistic view holds that AI will handle the more routine tasks, freeing workers to focus on higher-level work.

But as companies increasingly integrate AI, they are using it to hire fewer full-time employees and shift toward a fragmented workforce that resembles the gig economy.

What Is Gig Work?

The term “gig work” refers to flexible, short-term, or on-demand labor. It originated in the music industry, where a band plays a “gig.” Today, it broadly describes workers on platforms like Uber, DoorDash, or TaskRabbit. These jobs offer workers some autonomy over when and how much they work, but they also strip away most of the benefits that full-time employees are entitled to: paid leave, health insurance, workers’ compensation, overtime protections, or even a guaranteed minimum wage.

“One of the things we discuss as sociologists who study work is this idea of a shift from ‘career’ to ‘job’ to ‘gig.’ And AI is making that transition even easier,” says Alexandrea Ravenelle, a sociologist at the University of North Carolina at Chapel Hill and author of Hustle and Gig: Struggling and Surviving in the Sharing Economy.

A Blow to Office Workers

This transformation hits office workers hardest, as companies pursue efficiency gains through AI adoption. “There’s no evidence that jobs are disappearing, but there is a lot of evidence suggesting that once it becomes possible to eliminate full-time employment, companies will do it,” says Mary Gray, senior principal researcher at Microsoft Research and author of Ghost Work: How to Stop Silicon Valley from Building a New Global Underclass. Gray notes that technology can facilitate this shift, but companies are primarily motivated by cost-cutting.

“We’ll see it in every industry,” Ravenelle says. “I don’t think there is any industry that is safe from this.”

The Risk Spreading Across Jobs

Fifteen years ago, gig companies like Uber, DoorDash, and Instacart lured workers with promises of freedom and flexibility. These platforms offered on-demand work to anyone with a car and spare time. Workers were told they could be their own boss, set their own hours, and sometimes earn more than they could in traditional positions.

The reality proved radically different. Millions of platform workers worldwide now find themselves in precarious conditions, with unstable pay, unpredictable schedules, and virtually no protections.

A recent Human Rights Watch report details these consequences on a global scale, describing how platform-based work has stripped workers of basic protections such as minimum wage, workers’ compensation, paid sick leave, and control over their schedules, while delivering record profits to businesses. And while workers are told they are their own bosses, platforms exercise enormous control over their work, including the use of algorithms to assign tasks, set rates, and evaluate performance.

From Permanent Employment to the Gig Economy

Several delivery workers described in the Human Rights Watch report said they had been involved in traffic accidents and were forced to cover their own medical expenses out of pocket, since they had no access to workers’ compensation, a standard recourse for injured full-time employees in the United States. Others described spending long hours waiting unpaid for customers or orders, estimating that up to half of the time they devoted to work went uncompensated.

Lena Simet, a senior advisor on economic justice at Human Rights Watch and one of the report’s authors, says these experiences should serve as a warning to the broader workforce. “What we are observing in gig work is, in a sense, the early indicator of a wider phenomenon,” she says. “A lot of jobs could become gig jobs. I absolutely see this as a harbinger of what we may see in large parts of the labor market.”

The Future Is Already Here

Some data suggests that this future has already arrived. A recent Upwork survey found that roughly 60 million Americans, or 39 percent of the workforce, already engage in freelance or contract work, either full-time or part-time. That number is projected to reach 86 million, nearly half the workforce, by 2027, according to the global data analytics platform Statista.

The largest and fastest-growing segment is not rideshare drivers or delivery couriers, but knowledge workers: customer service representatives, copywriters, financial analysts, legal assistants, writers, and software developers.

Once workers are reclassified as independent contractors rather than employees, “we have the undoing of generations of hard-won workplace protections,” Ravenelle says. “Literally things that our great-grandparents died for, all those protections are gone.”

Creative Professionals Caught in the AI Paradox

Last month, Ravenelle published a study examining this shift among workers in creative fields, including actors, writers, photographers, dancers, musicians, producers, and costume designers.

Some of these creative professionals said they felt insulated from the AI boom, believing their work was too complex for a large language model or that it required human judgment. Many others, however, had already been forced into mercenary-style roles, including jobs involving the training of AI systems.

One musician in Ravenelle’s study had taken on the most lucrative role she could find in the current market: working as an “algorithmic composer,” creating basic musical loops and rhythms to train the very AI systems designed to replace musicians.

A writer in the study had taken a short-term contract rating AI-generated texts on behalf of a major tech company. When asked whether the existential irony of training software that would likely replace him and his colleagues troubled him, he replied: “This is the best opportunity for me right now. And if you can think of something better, let me know.”

An actor described accepting a job at a major streaming entertainment company, where he was told the work would ultimately reduce or eliminate the need for background actors and extras in television and film. Caught in an ethical dilemma, he likened the situation to “a construction worker laying the bricks for the gas chambers.” Yet without other options, he felt he had no choice: “Not only is AI taking over the world, but I’m also broke, so I guess I’ll just do it.”

Nursing and the Healthcare Sector

Nurses are also facing increasing “gigification.” In recent years, some hospital networks have outsourced portions of their core workforce to AI-powered staffing platforms such as ShiftMed, CareRev, and Clipboard Health. These platforms have been described as “Uber for nursing,” with a pitch that echoes the early days of the platform economy: download an app, enjoy flexible scheduling, bid on available shifts, be your own boss.

The reality has proven quite different. Nurses on these platforms report working for lower wages, competing for shifts, and being required to bring their own equipment that employers would ordinarily provide, such as stethoscopes and thermometers.

At least 17 states now recognize gig nursing platforms as “healthcare worker platforms” rather than staffing agencies, exempting them from many of the regulations that protect workers. Several of these “Uber for nursing” platforms have reached billion-dollar valuations.

The Pushback

Some worker groups have responded to this labor market shift using one of the few levers available to them: unionization. In March, healthcare workers in California went on strike to protest Kaiser Permanente’s use of AI and to raise concerns about the outsourcing of parts of their work to technology. In May, IT workers at the University of California voted to unionize, citing concerns about layoffs and pushing for greater control over how AI is used in their jobs.

Max Belasco, a business systems analyst at UCLA who is part of that unionization effort, said that concerns about AI were “a key factor in why we decided to organize.” He added that most of the university’s IT workers are not opposed to AI or other technologies, but wanted the institution to deploy them strategically rather than simply as a cost-cutting measure.

The Fight for New Rules in the AI Era

Securing maximum protections for workers will require more comprehensive policy action at the state, federal, and international levels. Gray suggests this could take the form of extending “basic rights” to all workers regardless of employment status, such as universal healthcare or a universal basic income.

Other policy proposals focus on formally extending protections to independent contractors and gig workers, including a proposed UN International Labour Organization treaty currently under discussion that could set standards on wages and workplace safety.

Simet of Human Rights Watch believes this could be a promising step toward establishing stronger worker protections, but warns that now is the moment to act, before it is too late. She argues that governments have been overly cautious about enforcing such measures, yielding instead to companies’ claims that they cannot operate under stricter worker protections. “It remains a very profitable business model, even if you have to comply with certain regulations,” she says. “And if this business model can only survive by exploiting workers, then maybe it shouldn’t exist.”