CGP Group
Back to Blog

Market Insights

AI Layoffs vs. AI Jobs: Why the Data Points to More Jobs, Not Fewer

AI layoffs continue to make headlines. The jobs AI creates rarely do. Yet the data on both sides points one way. I expect the next decade of AI to produce more work than it removes, with companies and people who adapt early benefiting most.

Oct 15, 2026Chris Watkins · Co-founder and CEO, CGP Group
Career Advice
Workforce Strategy
AI Transformation
AI Layoffs vs. AI Jobs: Why the Data Points to More Jobs, Not Fewer

The Layoff Count Tells Half the Story

Through September, AI was the leading reason U.S. employers gave for job cuts this year. Challenger, Gray & Christmas counted 120,136 AI-cited cuts, about 21% of the total.

But total announced cuts are down 39% from the same period in 2025. In September, AI was cited in 3,961 cuts, about 9% of the month’s total, making it the fifth most common reason. Challenger also records the reason an employer gives, which does not prove that AI replaced the work. We need to look more carefully at the reasons behind those layoffs. And just as carefully at the jobs being created alongside them.

McKinsey Global Institute estimates that AI and automation could reduce labor demand equivalent to about 36 million U.S. jobs by 2035, while the growing use of technology coupled with broader economic trends could create about 41 million jobs. Its conclusion: "The next decade's challenge is mobility, not scarcity."

A Stanford Digital Economy Lab study across 41 countries found that firms adopting AI grew senior employment by 6.7% and total employment by about 3.3%. In the New York Fed's August 2026 survey, 61% of service firms used AI. Only 4% cut jobs because of it, and those hiring more (13%) nearly matched those hiring fewer (15%).

The pressure is real at the entry level. Stanford's latest payroll data shows U.S. employment for 22-to-25-year-olds in the most AI-exposed jobs about 19% behind their less-exposed peers as of June 2026, up from 15% a year earlier. In India, Naukri's September data shows junior hiring up just 1% year on year, against 5% to 7% for experienced roles.

AI Adoption and ROI: What It Means for Companies

Last month I wrote that serious AI adoption often creates more hiring first. BCG's Applied AI Index published recently also indicates that serious AI investment yields returns. Corporate AI spending has doubled in a year from about 1.7% of revenue in late 2025 to 3.3% of revenue now. The 7.5% of companies that BCG classifies as "future-built" are delivering 2.4 times the revenue growth and 2.8 times the EBITDA growth of laggards. Another 41% are scaling AI and outperforming.

This gap has developed quickly. In 2025, BCG found just 5% of companies generating substantial value from AI. We see a similar trend in our own company and among clients around the world that adopted AI early. Although early in our implementation, we have seen a 20%+ increase in efficiency in our most important forward-looking efficiency metrics which ultimately drives EBITDA performance.

Workforces will continue to change. BCG's respondents overall expect headcount to fall roughly 10% to 15% by 2030, mostly in coordination and middle-management layers. By then, they expect dedicated AI roles to triple, from 7% of the workforce to 22%. Seven in ten future-built and scaling companies are already retraining staff.

In EY's CEO Outlook, 72% of CEOs believe skills shortages will become a greater barrier to growth than access to capital within three years. Yet 47% say they are not developing AI skills fast enough, and only 15% reinvest productivity gains in workforce development.

I expect the gap between early adopters and slower-moving companies to keep widening.

Skills-Based Hiring in the Age of AI

In McKinsey's research, about 85% of growing jobs require a credential: 38% are legally mandated, and the other 47% come down to employer preference.

Only one in seven displaced workers has a direct path to a growing job. Employers control part of that gap and must act now to be prepared. Each credential filter can become an unnecessary restriction on the talent pool when CEOs say talent is their limit.

The same logic applies to early-career hiring. The Stanford Digital Economy Lab study found that adopting firms reduced the junior share of their workforce, mainly by adding senior people. Companies that stop hiring juniors today will have fewer experienced people to promote in five years. This will vary widely across geographies where larger demographic trends are already creating a talent shortage.

AI Skills and Careers: What It Means for You

McKinsey estimates about 11 million U.S. workers may need to change occupation by 2035, around 770,000 a year, or 3.6 times the historical rate. More than 70% of workers will need new skills even if they never change employers.

Movement now, as in the past, can be to your benefit. ADP's September data shows U.S. job-changers' base pay up 4.8%, against 3.0% for those who stayed. For mid- to senior-level AI-enabled talent, we're seeing significantly higher increases globally. Candidates are asking for larger increases to make a move in the current market.

Indeed's tracker shows the share of U.S. postings mentioning AI rose from 3.71% to 7.34% in a year, and in the UK from 5.12% to 9.92%. In India, Naukri reported AI/ML hiring up 20% year on year in September, against 2% for white-collar hiring overall. Among our clients, approximately 20% of jobs assigned to us mention AI or list it as a requirement. Job descriptions measure intent more than hires.

How to Upskill with AI: 3 Habits That Work

In my article on the speed limit on AI, I argued that your employer's ability to adapt may matter more than the threat to your role. Build AI capability where you are and be ready to move toward the companies and occupations that are growing. Taking the initiative to upskill yourself has never been more important. Here is what I have found to be beneficial for my own development and that of our team.

  • Create a 30-day crash course on upskilling with AI, tailored to your specific job and industry sector. Give context of who you are and what you do to your preferred LLM and ask it to create a 30-day training and upskilling plan for you.
  • Dedicate 1 hour per day to upskilling yourself with the actual use of the technology. Like exercise, this may require you to get up earlier or work later into the evening, but every hour you invest will increase your own personal efficiency.
  • Be voraciously curious. Dedicate weekends to listening to podcasts or reading curated articles that approach AI from different perspectives so that you get the full range of views from abundance to fear. We all must form our own opinions based on educating ourselves and what we believe to be the reality of the impact of AI on us personally, our companies, and our broader economy. Don't let someone tell you what to believe on this. The stakes are too high to not be self-informed.

The Future of Work: A Larger Economy With More Room to Move

IMF Managing Director Kristalina Georgieva said on Oct 7 that AI, if done right, could add up to half a percentage point of world growth each year. Over a decade, she said, that is equivalent to adding an economy the size of ASEAN. Singapore, where we have our APAC headquarters, tops the IMF's AI preparedness index.

Across Asia Pacific, the Middle East, Europe, and the Americas, our role at CGP Group and Keystone AI is to connect the world's talent to the greatest opportunities. McKinsey's numbers suggest the next decade will need far more of those connections, made faster.

We believe there will be more work, with the advantage going to the companies and people who move toward it early.

Where AI Creates Work, We Connect Talent

If you’re hiring for AI-enabled roles or ready to make your next move, talk to our team.

Contact Us

Bridge the AI Talent Gap Faster

See how Keystone AI can help you optimize your recruitment lifecycle for faster, data-driven hiring decisions.

Request Demo

AI and Jobs: Frequently Asked Questions

Will AI create more jobs than it replaces?

McKinsey Global Institute estimates that automation could reduce U.S. labor demand by the equivalent of about 36 million jobs by 2035, while at the same time, AI and broader economic trends could create about 41 million jobs. A Stanford Digital Economy Lab study across 41 countries also found that firms adopting AI grew total employment by about 3.3%.

How many jobs will AI replace by 2030?

In BCG's Applied AI Index, companies expect their workforces to shrink by roughly 10% to 15% by 2030, mostly in coordination and middle-management layers. Over the same period, they expect dedicated AI roles to triple, from 7% of the workforce to 22%.

Will AI take my job?

For most people, the bigger risk is whether their employer adapts, not outright replacement. In the New York Fed’s August 2026 survey, only 4% of service firms cut jobs because of AI. The pressure is real at the entry level, though: U.S. Employment for 22-to-25-year-olds in the most AI-exposed jobs is about 19% behind their less-exposed peers.

What AI skills are employers looking for?

Employers increasingly want people who use AI in their day-to-day work. The share of US job postings mentioning AI nearly doubled in a year, to 7.34%, and about 20% of the roles CGP's clients assign to us mention AI or list it as a requirement. Mid- to senior-level AI-enabled talent is seeing significantly higher pay increases when they move.

References:

Explore more posts in Market Insights

Related Articles

Why Serious AI Adoption Often Creates More Hiring First
Market Insights

Why Serious AI Adoption Often Creates More Hiring First

The Speed Limit on AI and the Career Risk Behind It
Market Insights

The Speed Limit on AI and the Career Risk Behind It

From AI Pilots to AI Profit: Closing the Implementation Gap in 2026
Technology & AI

From AI Pilots to AI Profit: Closing the Implementation Gap in 2026

Back to Blog