AI Job Displacement: A Growing Concern

The Anthropic study uses a new metric, "observed exposure," to measure AI displacement risk by combining theoretical AI capabilities with real-world usage data. This metric tracks how AI tools are being used in professional settings versus what they could theoretically do. Computer programmers, customer service representatives, and data entry keyers are among the most exposed occupations. Despite the potential for displacement, the study found no significant increase in unemployment for highly exposed workers since late 2022. However, there is some evidence that hiring of younger workers in exposed occupations has slowed. This suggests AI may be impacting entry-level positions more than experienced workers. Several companies have already signaled they are replacing human employees with AI. HP plans to cut up to 6,000 jobs by 2028 due to AI-driven productivity. Wisetech is cutting 2,000 jobs, or 30% of its staff, because of AI-led efficiency. While AI may displace some jobs, it is also creating new ones. AI created about 119,900 direct jobs in 2024, while approximately 12,700 jobs were lost due to AI. Some analysts believe that AI will reallocate work rather than eliminate it outright. Despite the slower hiring in some AI-exposed sectors, the Anthropic study suggests AI is doing less than it could, and the disruption has already begun. A recent survey showed that nearly 4 in 10 companies will replace workers with AI by 2026.