AI Gains Are Losses for White-Collar Workers

Policymakers frequently point to career retraining as a remedy for workers in sectors affected by disruptive technological innovations. Most notably, as automation affected the demand for labor in the manufacturing industry, retraining programs emerged to help blue-collar workers learn new skills and transition to other trades.

Based on the latest economic headlines, some white-collar workers may want to start looking into career retraining of their own. The third quarter of 2025 witnessed a major wave of job layoffs that spanned a wide range of sectors from technology to consumer goods. Typically, you’d expect such a trend to develop in the wake of a massive economic shock, such as a pandemic or natural disaster. In this case, the rise of artificial intelligence is apparently fueling widespread disruption in white-collar jobs.

A compelling story is emerging as more data comes in. With corporate earnings climbing beyond expectations, the S&P 500 had gained 15% in 2025 through late October. White-collar jobs are simultaneously being eliminated at a rapid pace, as companies like Amazon, Target, United Parcel Service, Exxon, Chevron, and Meta have cut their headcounts in recent months. The reductions primarily target corporate, administrative and analytical positions – the roles most accommodating to an AI takeover.

C-suite executives aren’t hiding from the reason for the white-collar job market shift: AI is boosting their profits. For instance, Amazon already has more than a thousand AI-based services in place, and CEO Andy Jassy is promising more to come. He didn’t sugarcoat what that means for the company’s workforce in a message to employees this summer.

“As we roll out more Generative AI and agents, it should change the way our work is done,” Jassy said. “In the next few years, we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company.”

Trends at JPMorgan Chase illustrate the interplay between what the company is getting from AI and what it needs from employees. According to Marianne Lake, JPMorgan’s chief executive of consumer and community banking, the financial services company’s operations headcount has grown by 13% in the last five years; its business has expanded by 25% during that same period. In remarks at the company’s investor day in May, Lake attributed the increased productivity to AI enhancements, which are expected to further reduce staffing at JPMorgan by 10% and simultaneously grow the company’s business by another 25%.

Similar themes are surfacing across recent earnings calls. At Equity Residential, CEO Mark J. Parrell acknowledged that no one knows whether AI will prove a “net job creator or eliminator,” while adding that much of the optimism around AI’s transformative potential is being voiced by “people who benefit from the AI boom.” His comments echoed a wider corporate narrative: enthusiasm for AI’s long-run promise paired with caution about its near-term consequences. “I’m not a believer in the ‘no one will have a job’ theory of AI employment,” Parrell said, adding that the market will adapt as new generations of workers arrive with stronger data and AI skill sets.

Essex Property Trust CEO, Angela Kleiman, took a similar tone, describing layoffs as a “normal part of the business cycle” rather than purely AI-driven, while conceding that disruption is inevitable. And Microsoft CMO, Jared Spataro, speaking at Goldman Sachs’ Communicopia & Technology Conference, captured this duality when he said the company is “keeping a foot in two camps.” Microsoft continues to grow its traditional per-user business while developing an agent-based model to reflect how AI is reshaping work.

For the newly unemployed and those soon to be joining their ranks, the message sounds grim: They’re entering a tight market for jobs, and it’s probably going to get even tighter. Entry-level hiring rates for what are described as “AI-exposed” positions have dropped 13% in recent years, according to an analysis from Stanford University’s Digital Economy Lab. One estimate from Goldman Sachs puts roughly 7% of U.S. workers’ jobs at risk from AI applications. Globally, the World Economic Forum is projecting that AI, automation, and robotics could displace 92 million jobs by 2030, even as they create 170 million new ones.

Overall, the disparity in vibes between investors and a growing number of workers seems stark. With companies substituting AI’s contributions for the work previously done by white-collar employees, corporate profit margins and shareholder returns are poised to get even fatter. For those employees facing the prospect of AI-induced irrelevance, it might be time to think about a new line of work.

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