AI layoffs could far outpace new jobs — past economic shocks reveal how fast that can fuel unrest, a professor says

A significant upheaval in the job market may be on the horizon due to rapid advancements in artificial intelligence, according to Ekaterina Abramova, a professor at the London Business School. She cautions that the swift pace of AI development could lead to mass layoffs, outstripping the creation of new employment opportunities and potentially igniting social unrest. Historically, economic transitions triggered by technological advancements have unfolded gradually, affecting specific sectors over time. However, Abramova notes that the current wave of AI innovation represents a stark departure from these patterns. She emphasizes that a single AI model has the capacity to displace thousands of cognitive jobs across various industries almost instantaneously. Looking ahead, Abramova predicts that layoffs related to AI will surpass job creation in the next five to ten years, particularly if proactive retraining efforts are not implemented. Major corporations have already cited AI as a reason for workforce reductions, highlighting the urgency of the situation. Many new AI-related positions demand skills that displaced workers may not possess, leaving entry-level roles susceptible to cuts. Peter Orszag, CEO of Lazard and former director of the Office of Management and Budget, echoed these concerns during a recent appearance on CNBC. He warned of a potential jobs crisis if AI fulfills its promises, stating that labor markets are ill-equipped to handle rapid, large-scale disruptions. The societal implications of this transition extend well beyond unemployment rates. Abramova points to historical precedents where swift economic changes led to social unrest, such as the UK’s Enclosure Acts and the coal pit closures of the 1980s, which resulted in significant upheaval and strikes. Opinions among business leaders vary regarding AI's impact on employment. While some, like Anthropic CEO Dario Amodei and Ford CEO Jim Farley, foresee widespread displacement, others, including Nvidia's Jensen Huang and Meta's Yann LeCun, believe AI will transform rather than eliminate jobs. Huang suggests that companies that adopt AI early will likely thrive and expand their workforce, indicating a shift where jobs are lost not to machines, but to those who leverage advanced technologies effectively. Abramova warns that without appropriate measures, the fallout could lead to increasing inequality, persistent unemployment, declining consumer spending, and mounting political tensions. She cautions that, in extreme situations, democratic norms could be jeopardized. However, she remains optimistic that the most dire outcomes are not predetermined. By fostering worker-augmenting AI—where technology supports human roles rather than replacing them—there is potential for a more balanced future. This shift will demand regulatory incentives that prioritize responsible corporate practices over mere cost-cutting measures. Orszag reinforces the need for comprehensive support systems for displaced workers to prevent long-term underemployment, underscoring the urgency of addressing the challenges posed by AI advancements.