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While artificial intelligence has caused turbulence in the labor market, the recent decline in job opportunities has more to do with economic uncertainty, experts say.
“As we look across the broader labor market, we see that AI’s impact on the labor market has still been fairly small,” said Cory Stahle, a senior economist at Indeed, a job search site.
“The important asterisk is that that doesn’t mean that it has been zero,” he said.
Mandi Woodruff-Santos, a career coach, agrees: “I don’t think AI is to blame, I think the economic uncertainty is to blame.”
The state of the job market
The job market has not been good in recent months, whether you’re looking for a job or currently employed.
The U.S. economy added about 22,000 jobs for the month of August, while the unemployment rate rose to 4.3%, according to a Bureau of Labor Statistics report on Friday. Economists surveyed by Dow Jones had been looking for payrolls to rise by 75,000.
Of those who are still employed, some are “job hugging,” or “holding onto their job for dear life,” according to an August report by Korn Ferry, an organizational consulting firm.
But others are “quiet cracking,” which is a “persistent feeling of workplace unhappiness that leads to disengagement, poor performance, and an increased desire to quit,” according to cloud learning platform TalentLMS.
Growing economic uncertainty has kept workers from quitting their jobs and has led businesses to slow down hiring decisions, experts say.
“No business knows what the heck the Trump administration is going to do next with the economy,” said Woodruff-Santos.
“And in this kind of economic climate, companies are not sure of anything, and so they’re being very conservative with the way that they’re hiring,” she said.
How artificial intelligence is impacting the labor force
While some companies have announced layoffs to pursue AI technologies in their organizations, most of the impact has been isolated in the tech industry, said Indeed’s Stahle.
Most recently, Salesforce CEO Marc Benioff said the company laid off about 4,000 customer support roles, due to advancements in the company’s use of artificial intelligence software.
Other studies show that AI has mostly affected younger workers rather than mid-career employees.
An August report by Stanford University professors found that early-career workers (ages 22 to 25) in the most AI-exposed occupations experienced a 13% decline in employment. On the flip side, employment for workers in less-exposed fields and more experienced workers in the same occupations has either stayed the same or grown.
The study also found that employment declines are concentrated in occupations “where AI is more likely to automate rather than augment human labor.”
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Yet, the tech industry itself is not a large sector, said Stahle. According to a March 2025 analysis by non-profit trade association CompTIA, or the Computing Technology Industry Association, “net tech employment” made up about 5.8% of the overall workforce.
Net-tech employment is a designation that represents all those employed in the industry, including workers in technical positions such as cybersecurity and business professionals employed by technology companies, as well as full-time and self-employed technology workers.
For AI-driven layoffs to be considered a broad threat to the job market, the technology needs to start impacting other sectors, such as retail and marketing, said Stahle.
‘We’re seeing more and more demand for AI skills’
Some predictions on AI’s workforce impact argue that employers may be more likely to retrain workers rather than lay them off, according to a new report by the Brookings Institute, a public policy think tank.
“AI may be more likely to augment rather than fully replace human workers,” the authors wrote.
In fact, “we’re seeing more and more demand for AI skills,” said Stahle.
If you have the opportunity, experts say, it’s smart to learn how your field and employer are using AI.
“You’d be foolish not to do the research into your own field,” and understand how AI can be a tool in your industry, said Woodruff-Santos.
Look for training programs or webinars where you can participate or free trials of AI tools you can use, she said.
