LIVE MARKETS-As AI marches forward, is the job apocalypse closer than we think?

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AS AI MARCHES FORWARD, IS THE JOB APOCALYPSE CLOSER THAN WE THINK?

Goldman Sachs warns that generative artificial intelligence could soon take over a quarter of all work hours in the U.S., igniting fresh warnings of a looming "job apocalypse" and fears that permanent workforce disruption may be closer than expected.

The Wall Street brokerage predicts AI adoption may displace 6-7% of jobs over the next decade.

"Our baseline forecast for a 15% AI-driven labor productivity uplift and the historical relationship between technologically driven productivity gains and job loss implies that 6-7% of jobs will be displaced over the adoption period," said Joseph Briggs, analyst at Goldman Sachs.

"Risks are skewed toward greater displacement if AI proves more labor-displacing than prior technologies."

Although the brokerage sees upside risks in unemployment rates if AI adoption is more frontloaded or results in more labor displacement, it remains skeptical that unemployment rate increases will be permanent as long as human labor maintains a competitive advantage in certain aspects of production.

The report is significant as major U.S. corporations—including those in administrative, legal, and computer sectors—face increasing exposure to AI-driven automation, with survey responses indicating potential headcount reductions over the next 1-3 years.

U.S. companies across sectors are intensifying job cuts, extending a trend of workforce reductions from 2024, as they prioritize cost savings and streamline operations amid a challenging economic environment.

Goldman Sachs noted that "AI infrastructure investment is already boosting employment," citing job growth for electricians, HVAC (heating, ventilation, and air conditioning) installers, commercial building contractors, and utility construction workers since late 2022.

Despite concerns, the brokerage remains optimistic about new job creation. "Only 40% of workers today are employed in occupations that existed 85 years ago—suggesting that AI will create new roles even as it renders others obsolete," Briggs added.

(Akriti Shah)

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