AI not cutting jobs yet, but leaders urged to act

The Federal Reserve Bank of New York’s latest survey offers a striking conclusion: despite rapid adoption of artificial intelligence across industries, the technology has not yet had a material impact on jobs. Around 40% of service-sector companies and 26% of manufacturers in the district report using AI, up sharply from 25% and 16% the year before. Yet the majority of those companies are retraining staff rather than reducing headcount.

At first glance, this looks like reassurance. But history suggests it is a warning. Technologies that alter the structure of work tend to arrive quietly. ATMs, introduced in the 1970s, were supposed to displace tellers en masse. Instead, they changed the nature of the role. That pattern of task redesign rather than sudden collapse is familiar — and AI appears to be following it. Companies are applying it to narrow, repetitive processes — claims handling, invoice reconciliation, chatbots for customer queries — not wholesale restructuring.

As Harry Mason, head of client services at Mason Infotech, puts it: “AI agents are not replacements for human expertise. They are supportive tools, designed to free people from repetitive, time-heavy tasks so they can concentrate on creativity, strategy, and decision-making.”

That shift is already measurable. Kevin Fitzgerald, UK managing director at Employment Hero, points to new survey data: “Employees who use AI regularly rate their own productivity 17% higher. However, productivity can decline by up to 50% in organisations where AI is implemented poorly.” The opportunity lies not in rushing to cut jobs, but in rolling out AI in a way that augments work and builds confidence.

This is where leaders must read between the lines of the Fed’s findings. The absence of mass layoffs is not evidence of safety; it is the typical lag that precedes visible disruption. Labour markets rarely move in lockstep with technology. Contracts, regulation, and workplace culture slow the effect. Yet once organisations build confidence in new workflows, restructuring tends to follow.

Strategy alone, however, is not enough. Even the best-designed programme will falter if employees feel blindsided. Ayman Sayed, CEO of BMC Software, highlights the cultural imperative: “Before implementing AI, organisations should educate staff on the exact areas it will be used, how it will impact roles, and how it can be leveraged to enhance performance. This prevents job security anxieties and builds a culture that embraces the technology.” In other words, trust is as much a productivity tool as the AI system itself.

The New York Fed is right: AI has not yet moved the dial on unemployment. But that does not mean it is benign. Its impact is already visible in productivity, workflows, and skill requirements. The leaders who will navigate this transition best are those who treat the current lull not as breathing space, but as an opportunity to prepare — to retrain, redesign, and reposition their organisations before the next wave of change arrives.

After more insights? This article is a shorter version of a longer Business Quarter Executive essay, which explores international comparisons, industry case studies, and further leadership perspectives. Read the full piece on BQ Executive.