Heavier workloads, not unemployment: How AI is really changing the labor market

Technology companies are announcing mass layoffs linked to the adoption of artificial intelligence (AI). This spring, U.S. tech giant Oracle said goodbye to 30,000 employees, replacing some of them with AI that they themselves had helped train. Meta plans to cut around 8,000 jobs, around 10% of its workforce in an effort to offset the cost of its AI investments (as well as financial problems stemming from its failed bet on the metaverse). Overall, the global technology sector has eliminated nearly 135,000 jobs since the beginning of 2026 alone — 33% more than during the same period last year.

Employment among software developers aged 22–25 has fallen by close to 20% since late 2022, when generative AI entered widespread use, and AI-driven layoffs have spread far beyond Silicon Valley — affecting finance, logistics, consulting, media, retail, and manufacturing. Companies announcing layoffs of more than 10,000 employees include consulting firm Accenture, retail giant Amazon, financial services firm Citigroup, computer maker Dell, and delivery company UPS. Meanwhile, logistics provider C.H. Robinson laid off about 1,400 employees after introducing AI tools into its pricing and freight-tracking operations.

Bank executives have made no secret of their willingness to replace human workers with artificial intelligence. Standard Chartered CEO Bill Winters said he is replacing "low-skilled human capital" with technology, a move expected to eliminate 8,000 customer support positions over four years.

Goldman Sachs President John Waldron described his bank's traditional operations as a "human assembly line" that is ready for automation. Analysts at Morgan Stanley forecast that European banks could reduce their workforce by 10–20% over the next five years, while AI is expected to boost productivity by roughly 30%.

According to data from Challenger, Gray & Christmas, AI was the leading cause of layoffs in March 2026. However, over the first quarter as a whole it ranked only fifth, accounting for about 13% of all announced job cuts — behind market conditions, restructuring, business closures, and lost contracts. It is also worth noting that many "AI-related layoffs" have other underlying causes, including pandemic-era overhiring, inflation, and pressure from investors.

Interestingly, these large-scale layoffs have not translated into higher unemployment. Even in the United States, employment in the IT sector declined by only a fraction of a percent over the past year, according to the leading technology industry association CompTIA, which forecasts that net employment in the technology sector will grow by nearly 2% in 2026, reaching 9.8 million workers. More broadly, the U.S. labor market remains stable. As of April, the unemployment rate stood at 4.3%.

Several factors play a role in the overall result. First, while layoffs affecting tens of thousands of people make for striking headlines, they still represent only a small fraction of the labor market as a whole.