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Mar 24, 2026 - AI Worker Displacement Modest So Far

• A survey of about 750 CFOs by the National Bureau of Economic Research finds AI's near-term job impact modest overall (about a 0.4% headcount reduction expected in 2026) but the effects are uneven. Routine, clerical, and administrative roles face the clearest displacement risk while professional services workers like architects, engineers, and analysts are more likely to see AI enhance their productivity than eliminate their positions, at least for now. That protection may not last, as economists note the longer-term picture remains uncertain, but the more immediate concern for professional services pipelines is that the administrative and clerical roles being cut often serve as entry points to professional careers. As those stepping-stone jobs disappear, younger workers trying to break into fields like finance, consulting, or law may find fewer footholds, potentially creating a talent pipeline problem for professional services firms down the road.
• According to a Society for Human Resource Management (SHRM) study of nearly 2,000 members, 13% of organizations are already using AI-powered tools in their performance review processes. Managers are finding the technology useful for improving clarity, adjusting tone, and connecting employee accomplishments to business goals, but experts warn that over-reliance can lead to factual errors, generic feedback, and eroded employee trust. To get the most out of AI, managers should provide detailed, specific information - including on intangibles like attitude and peer relationships - and always verify the output before it reaches an employee. Privacy is also a serious concern: entering sensitive employee data or confidential vendor information into external AI systems can violate company policy. Human resources experts recommend using AI as an enhancer of human judgment, instead of as a substitute for it.

• Corporate board diversity is quietly sliding back toward pre-DEI norms as political and investor pressure eases. A Wall Street Journal analysis of S&P 500 board data from PeopleReturn shows companies are adding women and minority directors no faster than they did a decade ago, before diversity policies became widespread, and well below the post-2020 peak. Nearly three-quarters of last year’s new directors were men, and about four in five were white - roughly in line with 2016 levels. Companies have been dropping formal diversity policies, while influential adopters have backed off: banks such as Goldman Sachs scrapped board diversity requirements, major investors like BlackRock have relaxed targets, and proxy advisers no longer factor demographics into voting guidance. Court rulings striking down board diversity rules tied to Nasdaq and California have reinforced the pullback.
• The US lost about 1.2 million jobs in 2025, up roughly 58% from 2024, according to career services company Challenger, Gray & Christmas. In December alone, employers announced about 35,500 cuts, capping the highest annual total since 2020. The largest reductions came from the federal government (~308,000 cuts), followed by technology (~154,000), retail (~92,000), and non-profits (~18,000). Workforce reductions in technology are being driven largely by AI adoption, accounting for almost 55,000 cuts last year, and contributing to a 36% increase in sector layoffs compared with 2024. Government spending cuts not only affect federal employees, but Department of Government Efficiency reductions to grants and research continue to ripple into the nonprofit sector. Rising tariffs also remain a significant factor in the ongoing wave of workforce reductions.