Global AI Employment Impact Turns Negative: S&P Global and Fed Data Paint Divergent Picture
S&P Global reports -5 percentage point net employment impact from AI over past 12 months globally, while regional data shows stark contrasts between sectors and firm sizes.
Global Net Employment Impact Turns Negative
According to the S&P Global PMI special survey, AI adoption has generated a global net employment impact of -5 percentage points over the past 12 months, calculated as the percentage of businesses increasing workforce due to AI minus the percentage decreasing. S&P Global forecasts a further net employment impact of -2 percentage points globally from AI adoption in the 12 months ahead.
These headline figures mask significant variation across firm sizes. Large companies with 10,000+ employees forecast a net negative employment impact of -13 percentage points from AI in 2026. By contrast, small firms forecast a net positive employment effect from AI investment of +3 percentage points into 2026, while medium-sized firms forecast a net positive employment effect of +2 percentage points from AI in 2026.
Enterprise AI Goals Centre on Efficiency, Not Headcount Cuts
Despite the negative headline employment figures, enterprise AI objectives tell a different story. Among the companies surveyed in the Voice of the Enterprise: AI & Machine Learning, Use Cases 2026 research from 451 Research, process efficiency (64%) and employee productivity (59%) were the top-cited goals. Head count reduction was cited by only 24% of respondents as an AI objective.
Across 38 AI use cases surveyed, the average current adoption rate is 50% and the average planned adoption rate in the next year is 37%.
AI Initiative Delivery Remains Challenging
Only 37% of AI initiatives over the past 12 months were classified as live and delivering value, with many projects stuck in development or partial deployment. Only 46% of AI initiatives launched in the past year are estimated to be on track to achieve ROI within 12 months, with the figure even lower in France (43%) and Germany (38%).
European Labour Market Adjustments
Employment impacts from AI vary significantly across Europe. The UK reported a net negative workforce impact of -6 percentage points from AI, with cuts in administration, customer service and finance roles. Germany reported a net employment balance of -2 points from AI, with administrative and marketing roles cut and AI developer and implementation manager roles added.
Italy presents a notably different picture, reporting a net employment balance of +9 points from AI adoption, with new roles including marketing, graphic design, analyst and IT jobs.
S&P Global 1200 Index Shows Widespread Headcount Reductions
Of the S&P Global 1200 index participants, 994 (83%) had a lower head count in January 2026 compared to January 2025, while only 153 (13%) experienced an increase.
US Regional Data: Rising Adoption, Few Layoffs, Hiring Caution Ahead
The Federal Reserve Bank of New York’s Regional Business Surveys present a more nuanced picture. AI adoption among service firms rose from 25% in 2024 to 40% in 2025, with a further increase to 44% anticipated in the next six months. Among manufacturers, AI adoption rose from 16% in 2024 to 26% in 2025, with a further increase to 33% anticipated in the next six months.
While AI adoption is rising quickly across industries, firms report very few AI-driven layoffs. However, New York Fed survey data indicates that firms anticipate more reductions in hiring plans going forward, especially for college-educated workers.
Firms overwhelmingly intend to retrain workers rather than fire them as they adopt AI. New York Fed Survey of Consumer Expectations data shows that many workers place significant value on AI training.
New Fed Blog Series Launched
New York Fed Research Director Kartik Athreya published the post ‘AI’s Impact on Labor and Hiring’ on August 5, 2026, as the inaugural entry in a new blog series called ‘Street Level’ on Liberty Street Economics.
Source: S&P Global
Developments since publication
-
S&P Global's PMI survey forecasts a further net employment impact of -2 percentage points due to AI in the coming 12 months. Source
-
Among enterprise AI objectives surveyed, process efficiency (64%) and employee productivity (59%) are far more commonly prioritised than head count reduction (24%). Source
-
Large companies (10,000+ employees) forecast a net negative employment impact from AI of -13 percentage points, while small firms forecast +3 points and medium-sized firms +2 points. Source
-
In Germany, the net balance of AI's impact on employment was -2 percentage points, with administrative and marketing roles cut and AI developers and implementation managers added. Source
-
In the UK, the net balance of AI's impact on employment was -6 percentage points, with cuts concentrated in administration, customer service, and finance roles. Source
-
In Italy, the net balance of AI's impact on employment was +9 percentage points, reflecting more firms adding jobs in marketing, graphic design, analyst, and IT roles. Source
-
Cybersecurity is the most acute AI-related skills shortage, with 64% of respondents saying gaps had a moderate or severe impact on AI initiatives. Source
-
Machine learning and AI development skills gaps were rated as having moderate or severe impact by 59% of respondents; software development and engineering by 58%; and data management and governance by Source
-
In 2026, just 16% of surveyed firms completely trust third-party AI models and 30% mostly trust them, down from 24% and 42% respectively in 2023. Source
-
51% of surveyed firms reported investing in AI for identity verification and access assurance, with 29% targeting full automation in that use case. Source
-
New York Fed regional survey data show that AI adoption among service firms rose from 25% in 2024 to 40% in 2025, with 44% expected to use AI in the next six months. Source
-
New York Fed regional survey data show that AI adoption among manufacturers rose from 16% in 2024 to 26% in 2025, with 33% expected to use AI in the next six months. Source
-
New York Fed surveyed firms report very few AI-driven layoffs, but firms do anticipate more reductions in hiring plans going forward, especially for college-educated workers. Source
-
New York Fed research found (October 2024) that individuals exposed to generative AI tools reported bleaker expectations for job availability and income inequality. Source
-
The post is the inaugural entry in a new series called 'Street Level' authored by Kartik B. Athreya, Research Director at the Federal Reserve Bank of New York. Source
Irish pronunciation
All FoxxeLabs components are named in Irish. Click ▶ to hear each name spoken by a native Irish voice.