Artificial intelligence is automating specific workplace tasks rather than wholesale eliminating jobs, according to industry experts and business leaders—though thousands of positions have already been cut as companies integrate the technology into operations.
AI was cited as the top reason for job cuts in April for the second month in a row, according to the executive outplacement firm Challenger, Gray & Christmas. Yet the reality differs sharply from fears of mass displacement. Alexis Krivkovich, a senior partner at McKinsey & Company who leads the firm's People and Organizational Performance Practice, stated that "It's very few jobs that are actually entirely automated away by the current AI and robotics technology that's out there."
Krivkovich noted that while AI is technically capable of automating 57% of work-related activities, that capability is fragmented across "pieces and parts" of various jobs and responsibilities across organizations—not concentrated in single positions that can be eliminated entirely.
The Partial Automation Model
Business leaders are recalibrating existing roles around responsibilities that require human judgment and oversight. Nitin Seth, cofounder of digital services and consulting firm Incedo, explained his company helps clients boost productivity using AI by at least 20% to 25% without proportional staff reductions because AI handles only certain components of different roles. "You can't take one quarter of Lisa, one quarter of Jessica, one quarter of Nitin and one quarter of somebody else and make it one person," Seth said.
Microsoft reported about one week ago that "The anxiety around AI at work is real—from fears of job loss to the pressure to keep up with rapidly evolving technology." The software giant surveyed 20,000 workers using AI across 10 countries and found that most companies haven't yet adjusted employee metrics and incentives to align with how AI is changing work. Instead, many organizations are grappling with determining which skills human workers need going forward.
AI has been cited in more than 49,000 job cuts so far this year, according to Challenger, Gray & Christmas. Block, the financial technology company behind Square and Cash App, laid off 40% of its staff this year because AI enabled the company to accomplish more with smaller teams. Coinbase is reducing its staff by about 14% in part because AI is enabling engineers to "ship in days what used to take a team weeks," its CEO said Tuesday. Cloudflare reported that its AI use has increased by more than 600% in the last three months alone.
Shifting Skill Requirements
The technology sector has experienced the most disruption. A September survey from Google's research arm found that 90% of tech workers use AI in their jobs. Stack Overflow found that 84% of respondents either use AI tools in the software development process or plan to.
However, software engineering involves far more than writing code—including reviewing code, designing systems, troubleshooting problems, and deciding what to build. Boris Cherny, head of Claude Code at Anthropic, said in March that "I think by the end of the year, we're going to start to see the idea of software engineering go away." He suggested the term "builder" might be more fitting as the job expands and writing lines of code becomes a smaller component.
Sujata Sridharan, who recently worked at fintech firm Bolt and has spent roughly a decade as a software engineer, noted that although she uses AI, her work still requires problem-solving and critical thinking. "With AI being used more and more, the skills that are actually required on the job have shifted to, are you able to recognize what is the right code quality? Are you able to problem solve?" Sridharan said.
Evolving Frontiers
Dan Priest, PwC's US chief AI officer, stated it's possible there will be "some job disruption on the horizon," but he said he isn't seeing mass layoffs at most companies and whole categories of jobs aren't currently at risk.
The technology landscape continues shifting as AI models evolve and potentially take on more office tasks. Anthropic announced within the past week new AI agents built for financial work, including building pitchbooks and crafting credit memos.
Umesh Ramakrishnan, cofounder and chief strategy officer at executive search firm Kingsley Gate, said, "It starts at the bottom, and it keeps going up. And I don't know where it stops."
Why This Matters:
The AI-driven transformation of the workplace presents both fiscal and organizational implications. While companies are achieving measurable productivity gains—20-25% improvements without proportional headcount reductions at some firms—the technology is simultaneously enabling significant workforce reductions at others, with over 49,000 job cuts attributed to AI this year alone. The fragmented nature of AI automation across job components rather than entire positions suggests labor market adaptation may occur through job redefinition rather than mass displacement, though the evolving capability of AI agents means this assessment could shift rapidly. Policymakers and business leaders face the challenge of managing workforce transitions while preserving the competitive advantages that AI automation provides. The absence of comprehensive employee metric adjustments at most companies indicates the market is still discovering how to integrate AI productivity gains with sustainable employment practices.