During 2025, concerns about the impact of artificial intelligence on the labor market escalated, especially with the rapid development of automation technologies. A study issued by the Massachusetts Institute of Technology last November indicates that “artificial intelligence is expected to replace about 11.7% of jobs in 2026.”
“Entry-level jobs” are particularly affected by developments in artificial intelligence and automation. According to a survey conducted by “TechCrunch” with a number of investors and employers, some of them believe that they are able to eliminate entry-level jobs and replace them with modern technologies.
“Maril Evans,” the founder and managing partner at the investment firm “Exceptional Capital,” expects that increased spending on artificial intelligence may “draw financial resources allocated to recruitment and employment,” which may lead to a decrease in employment rates within companies.
In contrast, “Eric Bahn,” the founding partner at the investment fund “Hustle,” explained the difficulty of determining the direct impact of artificial intelligence on all jobs. He pointed out that companies need to analyze the repetitive roles that will become more automated, in addition to the complex roles that may be affected by technological transformation. He mentioned that the potential results may range from increased productivity, or layoffs, or simply adding artificial intelligence to enhance the current labor market.
“Antonia Dean,” a partner at “Black Operator Ventures,” confirmed that even if companies do not direct their budgets towards artificial intelligence, companies are likely to use artificial intelligence as a justification for laying off workers or reducing labor costs.
The year 2025 has already witnessed a “widespread wave of layoffs” in the technology sector, where the total number of employees laid off exceeded “1.17 million employees” in major companies such as “Amazon, Microsoft, Meta, and Intel.”
This number exceeds what companies witnessed during the “Covid-19” crisis in 2020, where companies laid off less than 500,000 employees combined.
In detail, “Amazon” reduced more than 14,000 jobs from its total workforce of 350,000 employees, while “Microsoft” layoffs amounted to more than 15,000 employees, or about 7% of its total workforce. As for “Intel,” it was the highest in terms of the layoff rate, as it relinquished more than 24,000 jobs during the year.
Despite the divergent views of investors and company heads on the impact of artificial intelligence, most of them agree that “its impact on the labor market in 2026 will be significant and may exceed what happened in 2025.” Projections indicate that the accelerating use of automation and artificial intelligence will lead to a radical reshaping of the core of the labor market, especially in jobs characterized by repetitive tasks or requiring little experience.
