Jobs lost to AI could reappear elsewhere — and solidify AI-focused roles

There are conflicting signals about whether AI is creating or destroying jobs, though many companies have blamed the technology for recent cuts. 

Analysts and industry experts say the reality is more nuanced: jobs being lost now to AI will likely reappear elsewhere, especially for those with hands-on AI experience.

In other words, while AI may be reshaping the labor market, it is not eliminating the need for talent. “We are seeing a shift toward the type of talent employers need and the expectations they have for impact,” said Kye Mitchell, head of Experis US.

Though hiring for entry-level jobs is under pressure as AI absorbs more routine work, that doesn’t eliminate opportunity, she said. “It changes the expectations. Employers now expect candidates to come in with hands-on experience, AI familiarity, and the ability to contribute faster.”

While reductions in headcount are real, the savings from cutting those jobs will reappear elsewhere in hiring for other roles or tasks, said Deepak Seth, senior director analyst at Gartner.

For example, though Claude Code might help IT leaders reduce the number of developers they have on hand, one faulty software rollout could lead to new hiring to fill gaps, Seth said. “Maybe you need to hire more quality testers in another group. Maybe you need to hire more people to train people on how to use these tools,” Seth said.

One thing seems clear: AI is indeed affecting young workers and suppressing entry-level wages. And it goes companies a rationale to do layoffs.

Many big tech companies are attributing large job cuts to AI, Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas, said in a May 7 blog post. 

April was particularly brutal for AI-related layoffs, with some top IT firms cutting positions due to efficiencies from AI. “They are also often citing AI spend and innovation. Regardless of whether individual jobs are being replaced by AI, the money for those roles is,” Challenger said.

Opinions vary among workers about whether AI is taking jobs away, according to a study published last month by ADP Research and the Stanford Digital Economy Lab.

Though young workers are especially worried AI will slow job creation in some sectors, more experienced workers are sanguine about losing their jobs, Stanford and BCG said in separate studies.

“There appears to be less cause for concern about widespread job displacement … particularly those in occupations with high experience premiums in which AI is likely to complement the worker’s tacit knowledge,” BCG said in its study “AI will reshape more jobs than it replaces.”

LinkedIn in a January labor report went a step further and projected that AI had created 1.3 million new jobs globally. The jobs were in the areas such as data annotators, forward-deployed engineers and AI engineers.

Microsoft cited the LinkedIn report in its recent Work Trend Index study, and said AI is  creating a new operating model allowing companies to be smarter and more efficient.

But the company sidestepped the larger issue of how AI is affecting the job market. “Some jobs will change. Some will go away. And many that don’t exist yet will emerge,” Microsoft said in the study.

Source:: Computer World