$3 billion Lattice ‘made history’ being the first to give AI ‘workers’ rights

The tech unicorn—founded by Sam Altman’s brother Jack Altman and valued at $3 billion in 2022—announced it “made history” this week by giving so-called “digital workers” employee records and integrating them into organization charts, allowing its human coworkers to see the roles of AI in their workplace. After a surge of online pushback, the company said it would no longer pursue the project only three days after its initial announcement.

“This innovation sparked a lot of conversation and questions that have no clear answers yet,” CEO Sarah Franklin said in a statement to Fortune. “We look forward to continuing to work with our customers on the responsible use of AI but will not further pursue digital workers in the product.”

Lattice’s announcement was part of the company’s greater effort to integrate AI into the workplace in a “responsible” way, according to the company, which ostensibly meant treating the technology like a human hiree: training it, onboarding it, and even assigning it a manager.

“It takes the idea of an ‘AI employee’ from concept to reality – and marks the start of a new journey for Lattice, to lead organizations forward in the responsible hiring of digital workers,” Franklin said in a LinkedIn post Tuesday.

Lattice skyrocketed to success thanks to pandemic-era remote work and a tight labor market that forced companies to confront hiring and employee-support practices that were previously unconventional. But the announcement from the people-focused company struck a nerve with its LinkedIn followers, who responded to Franklin’s announcement with shock and concern for the future of AI integration into the workspace.

“This strategy and messaging misses the mark in a big way, and I say that as someone building an AI company,” Sawyer Middeleer, chief of staff at AI sales platform Aomni, wrote in response to Franklin’s post. “Treating AI agents as employees disrespects the humanity of your real employees. Worse, it implies that you view humans simply as ‘resources’ to be optimized and measured against machines.”

There’s already mounting anxiety around the role of AI in the workplace, particularly as its use proliferates across industries. A March 2023 Goldman Sachs report found AI could replace or degrade up to 300 million jobs in the U.S. and Europe, while venture capitalist Kai-Fu Lee predicted 50% of human workers will be replaced by AI by 2027. The predictions have taken a toll on workers, with one-third of employees saying they’re worried about their jobs being replaced by technology, consulting service PWC found in 2022.

Lattice’s own transition to AI may not have assuaged those anxieties. Its announcement about responsibly hiring AI employees comes a year after the company laid off 15% of its staff—over 100 workers—in January 2023 amid hiring and spending slowdowns.

Will AI really replace us?

The initial ripple of the AI technology in the workplace is already starting to make waves—though maybe not in the way anxious workers initially anticipated. Amid a strategic shift to invest in generative AI, Intuit will lay off 1,800 workers—an effort that does not have to do with cutting costs, its CEO said in an internal memo. The financial software company said it will instead rehire almost the same number of employees who are better suited for the position. About 1,000 of those laid-off employees failed to meet performance expectations, Intuit said.

Tech leaders aren’t convinced these layoffs are a harbinger of a wave of AI taking over jobs. “I talk to a lot of CEOs, and I’ve learned very quickly that they are not thinking of AI replacing us—I can say that with full authority,” Ronnie Sheth, CEO of advisory firm Senen Group, told Fortune.

While the technology may eventually replace some assembly-line jobs, administrative and analytical tasks—which may result in some layoffs—responsibilities like branding and management are not yet under threat. CEOs are more interested in constructing and preserving strong company culture than they are with the quantitative benefits AI may provide, according to Sheth. Moreover, the addition of AI in workplaces may not mean those employees can’t find meaningful work opportunities elsewhere, Sheth argued.

“I think there’s a balance between rescaling the labor force and also setting policies in place to ensure that AI is being used for human good,” she said. “And not taking away people’s livelihoods.”