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Even if we don’t yet have a clear answer to the question of how artificial intelligence is impacting the bottom line of the job market, there is at least one AI question that job seekers and current workers who want to retain their roles should be prepared to have a clear answer to by 2026.
“For many roles, the criteria will no longer be ‘Can this person do the job?’ but rather, ‘Can we do it in a way that adds unique value beyond what AI can do on its own and beyond what humans can do on their own?'” said Daniela Russ, director of the MIT Computer Science and Artificial Intelligence Laboratory.
The evolution of the relationship between AI and human work is a key issue in the labor market, and the benefits of the technology are starting to show up, at least anecdotally, in productivity data. Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said artificial intelligence has slowed large companies’ hiring efforts and that many companies are seeing “substantial productivity gains.”
Kashkari told CNBC’s “Squawk Box” that the impact is primarily limited to large companies, and that he expects the labor market as a whole to continue to see fewer jobs and fewer layoffs. But he added, “There are countless anecdotes of companies using this and actually seeing productivity improvements. Companies that I talked to two years ago were skeptical, but now they’re saying, ‘No, they’re actually using it.'”
“I don’t think we’re actually hiring fewer people.” AMD CEO Rhys Hsu told CNBC’s John Fort at the CES conference in Las Vegas. “Frankly, we’ve grown so much as a company that we’re actually hiring a lot of people, but we’re hiring different people. We’re hiring people who are driving AI.”
Last year, the CEOs of Shopify, Accenture, and Fiverr were among the examples of business leaders overseeing layoffs while encouraging employees to upskill and face the possibility of becoming less relevant in the workplace.
Mika Kaufman, CEO of Fiverr, said in a statement that he encouraged his team to “grow their AI skills, but it wasn’t a symbolic gesture. It was a recognition of where the world of work is headed. AI is reshaping every industry, and the most responsible thing companies can do is prepare their employees for that change early, transparently, and purposefully.”
There is still some ambiguity in how companies are talking about this change. For example, AI can handle repetitive or computationally intensive tasks so that humans can focus on higher-order tasks involving judgment, empathy, creativity, and context. This vision of technology-enabled AI improving human work represents a “movement from replacement to augmentation,” Russ said.
But workers are understandably skeptical.
“This transition is not only about efficiency, but also about trust and transparency. Employees need to trust that companies are not just using AI as a cover to cut costs,” Russ said. She added that the move to AI risks eroding, rather than amplifying, uniquely human skills.
Kaufman acknowledged that transparency from management will not eliminate worker concerns. “People may worry that by learning how to use AI, they are training a tool to replace it,” he says. “But I see something quite different happening. Individuals who learn to guide AI and interpret and improve its output are not training their successors; they are becoming the architects of the next generation of work,” he said.
Fiverr provides a platform that connects employers and freelance workers, and is at the forefront of AI adoption as it facilitates work in the field, where the use of AI is on the rise. According to the 2024 Freelance Economic Impact Report, 40% of freelancers are already using AI tools, which Kaufman says saves them an average of more than eight hours a week. According to the study, early adopters offer better jobs and receive higher compensation. “People who learn to integrate AI are not being replaced by AI, they are thriving because of it,” he said.
A recent study by Yale University’s Budget Institute suggests that the relationship between AI and work is not that different from previous periods of technological advancement. It concluded that the broader labor market has not been disrupted since ChatGPT was released in late 2022, and that available data shows that AI automation is not eroding demand for knowledge-based labor across the economy.
The Budget Lab researchers cautioned that there are no conclusive findings in the first few years of introducing new technology, but cited historical precedents such as the introduction of computers into offices to show that “widespread technological disruption in the workplace tends to occur over decades rather than months or years.”
“Even if new AI technologies continue to have an equally or even more dramatic impact on the labor market, it is reasonable to expect that widespread effects will take longer to emerge,” the Yale report said.
A recent McKinsey study predicted that AI could “theoretically” automate more than half of current U.S. work hours, but added that this view does not necessarily mean job losses. “Some roles will shrink, others will grow or change, and new roles will emerge; work will increasingly focus on collaboration between humans and intelligent machines,” the authors write.
McKinsey estimates that 70% of the skills needed in the job market can be applied to both automatable and non-automatable tasks. “This overlap means that most skills will remain relevant, but how and where they are used will evolve,” the researchers wrote.
Companies that lean heavily toward AI as a job replacement early on may also readjust based on experience.
Armando Solar Lezama, a professor of computing at MIT and associate director of MIT CSAIL, cited the example of fintech company Klarna. The company laid off 40% of its workforce in a policy shift to prioritize AI, but has had to rehire many employees in its customer service department due to performance degradation caused by the technology. “Some of these efforts are likely to backfire,” Solar-Lezama said. But workers across the economy should not feel unduly reassured if an individual company’s AI fails. “Many will be successful and lead to layoffs,” he said.
For workers who now fear being ordered by their employers to train on robotic replacements, it’s the organizations that pay the biggest price, Solar-Rezama said. In fact, human failure at work remains an invaluable skill for the workplace itself.
“It’s important to note that AI systems don’t learn in the same way as humans,” he says. “Existing organizations are set up to deal with human failure modes, so just replacing humans with AI systems will cause organizations to fail. It will take time for companies to understand that,” he added.
