AI Layoffs Slow as Companies Add Workers to Use AI

AI-related layoffs appear to be slowing as companies adjust to using artificial intelligence and recruit workers to help deploy it, according to recent New York Fed data.

Only 4% of AI-using service firms said they had laid off workers because of AI in the past six months. No manufacturers reported AI-related layoffs in 2025 or 2026.

At the same time, around 13% of service firms said AI had caused them to hire more employees. These additional workers are often brought in to help companies deploy and use AI.

The data also indicates that AI is not displacing workers as much as earlier fears suggested. More than one in three AI-using service firms are retaining workers, while more than one in five manufacturers are doing the same. Companies are teaching workers how to benefit from AI's productivity effects as roles change.

“Existing workers are much more likely to be retrained than replaced by AI,” the report's authors wrote.

AI is still affecting recruitment. Some 15% of service firms said AI was causing them to hire fewer people than they otherwise would have, up from 12% in 2025. The New York Fed data describes a broader shift involving hiring, layoffs and retraining.