AI was cited in more than 120,000 U.S. dismissals in the first nine months of 2026, about 21% of all layoffs, according to Challenger, Gray & Christmas. Companies are also redirecting compensation—including bonuses, equity, raises, benefits and salaries—toward AI spending, while surveys show a divide between employers cutting head count and those investing in workforce development.
Entry-level workers are increasingly turning toward jobs involving physical labor, social interaction and other skills that are harder to automate. Stanford Digital Economy Lab research found employment among 22- to 25-year-olds is 19% lower than expected in highly AI-exposed professions, while employment rose in less exposed categories; slower hiring, rather than increased separations, drove the gap.