AI’s productivity payoff is real but narrow. The bigger jobs test may come with the next downturn

Layoff announcements make a lot more noise. U.S. employers cited AI in 120,136 announced job cuts through September, about 21% of all cuts and more than any other stated reason, according to outplacement firm Challenger, Gray & Christmas. Those tallies capture what companies say, though, and labour economists doubt they reflect what is actually driving decisions.

“Simply put, we are not seeing that in the labor data,” Lightcast economist Elena Magrini told HRD when Challenger’s count passed 112,000.

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Is this the calm before a storm?

“Historically automation-related labor disruption is quite cyclical,” Briggs wrote. Companies tend to automate and cut staff as the economy slows, not in good times. The share of Americans in routine jobs such as clerks, machine operators and secretaries held steady through expansions and dropped in steps during the recessions of the early 1980s, 2001, 2008 and 2020. It never recovered.

Assuming AI eventually lifts productivity by 15% in the U.S. and other developed economies, Briggs estimates that up to 9% of workers, roughly one in 11, could be displaced during the transition, with slower hiring trimming employment by another 3%. He gave two reasons the effect has stayed small so far. Only 23% of U.S. establishments have built AI into regular workflows, and a resilient 2026 economy has given companies little reason to cut labour costs hard.