Rapid advances in AI have fueled fears of mass job losses. Enterprises shifting focus from generative to agentic AI, which promises meaningful returns on AI investments, have only intensified this anxiety.

In 2025, companies such as Amazon, IBM, and Salesforce announced layoffs citing AI. Q1 2026 picked up where 2025 left off, with firms, including Block, WiseTech Global, and Livespace, also pointing to AI as a factor in job cuts. Although sceptics argue that the technology has been used as a cover for traditional cost-cutting, a December 2025 Harvard Business Review survey of over 1,000 global executives found that 60% of companies had already cut headcounts in anticipation of AI’s impact.

Technological leaps throughout history have triggered panic over permanent mass unemployment, yet have proved to be net job creators over time. We saw this with the Industrial Revolution, the rise of the automobile, and 20th-century automation.

However, AI pessimists argue that this time it is different because AI—especially agentic AI—can automate complex cognitive work typically performed by white-collar employees. A 2025 World Economic Forum report found that 40% of employers expect to reduce workforces where AI can automate tasks. The impact of AI on employment is not predestined, and the assumption is that it will ultimately create more jobs than it destroys, although what these jobs will be is not yet fully understood.

With that said, AI will fundamentally transform labour markets as agentic AI scales. Winners and losers will emerge across all sectors. Some jobs will be augmented or eliminated, while new ones will be created. However, this could take decades to play out. After all, MIT research found that around 60% of jobs in the US in 2018 did not exist in 1940. Entry-level ‘grunt work’ is first in line to be automated by AI, with companies such as Deloitte, EY, KPMG, and PwC already cutting graduate hiring as AI takes over routine tasks. Repetitive, rule-based roles (e.g., copywriters, programmers, translators) are generally most at risk from AI, while those requiring a human touch or experience-based knowledge (e.g., healthcare professionals, skilled tradespeople, and psychologists) are least at risk.

The most in-demand skills in labour markets will also shift, including a growing emphasis on comfort working with AI. McKinsey found that demand for AI fluency, including the ability to use and manage AI tools, was the fastest-growing skills category in US job postings between 2023 and 2025. Companies will need to upskill and reskill workers, but this is easier said than done. It requires substantial financial commitments, clear organisational foresight, and intentional collaboration to be successful.

There also needs to be an update to labour laws, a review of ethical parameters for AI, and regulations to ensure the equitable distribution of AI capabilities.

In short, despite the doom and gloom, AI is not coming for everyone’s jobs. But that does not mean there will not be significant disruption in the years ahead.

"AI will not lead to mass permanent unemployment" was originally created and published by Verdict, a GlobalData owned brand.

 

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