Key Takeaways
- We’re yet to see mass job cuts due to AI, despite early warnings from leaders
- Experts suggest AI still needs humans to do most tasks, however, this could change as the technology improves
- Jobs could still be lost to AI in the future
Not that long ago, prominent AI leaders including Sam Altman and Dario Amodei predicted their AI systems would replace workers, leading to massive shifts across organizations and industries. But while AI has made an impact, their early theories are yet to hold weight.
Arguably, graduate and entry-level workers are suffering the most from AI. However, many companies are struggling to generate ROI from AI investments, and systems aren’t yet able to operate entirely without humans, which could be why jobs haven’t suffered substantially.
Hiring leaders confirm that human skills, including leadership, creativity, and relationship building remain vital to any organization in the AI era. Nevertheless, some suggest there is still a possibility we’ll see mass AI-related job losses in the future.
In May of 2025, Anthropic CEO Dario Amodei sounded alarms when he said AI could wipe out half of entry-level white collar roles, and push the unemployment rate to 10-20% within 1-5 years.
In early 2026, CEO of Microsoft AI Mustafa Suleyman said most tasks done “sitting down at a computer” would be fully automated within 12-18 months. OpenAI CEO Sam Altman, who catapulted AI into the mainstream with the release of ChatGPT in 2022, has been warning about mass job losses since as early as 2015.
Most leaders have now backtracked on their original claims. Altman came out and said he was “pretty wrong” about the economic impact of AI, Suleyman re-routed and said he expected AI to help white collar workers, rather than replace them, as did Amodei.
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Either way, we’re yet to see AI completely take over the workplace. Undoubtedly, it has played a role in augmenting and shifting roles and industries, but current data suggests we’re not at the point of an apocalypse once foretold.
According to data from consulting firm Challenger, Grey & Christmas, 112,713 AI-related job cuts were announced in July 2026. This number rose to 116,275 in August. However, August also saw the lowest monthly layoff number linked to AI since December 2025.
Overall, total layoffs to August are down 41% year on year. Hiring plans, in comparison, are up 37%. In some lights, the argument that AI will create more jobs seems to have gained strength.
AI is Unable to Function Without Humans, For Now
Despite some confirmations of AI-related business value, uncertainty is still being felt by leaders. Yes, companies are adopting AI, but several studies indicate clear ROI is yet to follow.
According to PwC’s Global CEO Survey, 56% of CEOs have seen no significant financial benefit from AI, and only 1 in 8 report both cost and revenue gains. For workers, 94% of marketers say AI hasn’t made any significant impact.
Of those that have displaced workers in favor of AI, success hasn’t been a guarantee. The most notable example being Klarna, which replaced around 700 customer service workers with AI, only to invite them back after complaints from customers.
The human element, it seems, remains a vital component. “AI isn’t replacing people yet at scale because it needs people to be effective,” Sabra Sciolaro, chief people officer at Firstup, told Tech.co. “We are at a place where it needs people to give it direction and context, and the quality of the input is so critical.”
That’s not to say AI could never perform more effectively than humans. Actually, it could get better very soon, given the speed at which we’re developing. However, at the moment, the technology still leads to a lot of mistakes, and humans are needed to prevent them.
Sciolaro explains how what she looks for in a job candidate has changed, because of AI. “Curiosity and a willingness to try and fail and iterate, is something that becomes more important with every passing week and month, as things are moving more and more quickly.”
Lisa Highfield, principal director of research and advisory for technology and AI at McLean & Company, agrees that a “human-centric” mindset is still very much needed in times of implementation. Highfield works directly with organizations as they introduce AI.
“We talk about things beyond employee empowerment,” she told Tech.co. “Being able to think about new ways of working and having a culture of innovation and even the resiliency that we need as we go through this.”
Admittedly, data related to AI job cuts is always going to be difficult to track. The above Challenger report, for example, measures announced cuts and reasons given by employers. Actual displacement isn’t measured, and corporate messaging, particularly as more people fear job losses due to AI, makes the true picture harder to reveal.
Nevertheless, there are areas we could point to that suggest the AI takeover of jobs is already happening, particularly in the graduate and entry-level markets.
A study from The Stanford Digital Economy Lab found that, among 22-25 year-olds in highly AI-exposed occupations, employment is about 19% below the trend compared to peers in less exposed roles.
Similarly, recent graduates were found to be experiencing an unemployment rate of about 5.6-5.7%, higher than the general unemployment rate of 4.1-4.2%. Only four years ago, these two percentages were almost identical.
Beyond the graduate and entry-level markets, plenty of major companies have referenced AI in layoff messages, including Block, Salesforce and Accenture. Just recently, Microsoft offered a quarter of its workforce a voluntary redundancy buyout while looking to spend billions on AI.
And, CEOs still expect to be making cuts. There’s an argument to say that what we’re seeing with the graduate market is only the beginning, and AI’s impact will eventually spread to the rest of the population.
When I asked Sciolaro if we’re heading in this direction, she said she didn’t think so. “I don’t see it as, we’re heading in the direction and we’re clearly on a path where all work is automated. I just don’t think it’s practical.”
Highfield, on the other hand, believes layoffs are still a possibility. “I think the potential for AI replacing roles exists. I think there’s a lot of variability across roles, and we know that roles are a combination of many different tasks and the potential for AI to automate those tasks varies widely. So yes definitely, the potential is there.”
