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