Anxiety, downsizing and automation: how AI is changing the corporate world

As tech companies continue to talk about a “productivity revolution” and a new phase of human-artificial collaboration, the mood inside the corporate world is growing increasingly anxious. A new Mercer Global Talent Trends report found that almost all large businesses are already looking at AI not as an employee assistant, but as a downsizing tool.

According to the study, 99% of surveyed CEOs expect layoffs related to the implementation of AI within the next two years. At the same time, only a third of managers believe that people and algorithms will be able to coexist normally in the same work system.

AI is increasingly perceived as a replacement rather than an assistant

In the last few years, the largest IT companies have been promoting the idea of ​​”augmented workforce” – a model in which artificial intelligence strengthens a person, rather than supplanting him.

Inside the business, however, the picture is different. For most top managers, AI is gradually turning primarily into a cost optimization mechanism.

Today, automation is seen as one of the most promising ways to increase efficiency and return on investment. This especially applies to tasks related to data analysis, document preparation, communication with clients and basic administrative work.

The problem is that such tasks have traditionally been performed by entry-level employees.

Young specialists are the first victims of automation

Young employees aged 22 to 27 were the most vulnerable group. According to research cited by Gizmodo, the job market for entry-level professionals is now worse than it has been since the worst months of the pandemic.

The reason is quite obvious: modern AI models are best suited to routine entry-level work.

In the past, interns and junior specialists were engaged in writing reports, processing information, writing drafts, searching for data or basic communication. Today, a significant part of these tasks is increasingly transferred to algorithms by companies.

As a result, the very “entry point” into the profession, through which employees traditionally gained experience, disappears.

This creates a systemic problem: the business receives short-term savings, but at the same time risks losing the future labor pool.

Companies talk a lot about AI – but they themselves don’t understand what it’s all about

One of the most revealing conclusions of the study was the deep insecurity of the managers themselves.

Despite massive investments in AI, only 32% of CEOs believe humans and machines will be able to work effectively together in the long term.

In fact, even businesses that are actively implementing automation do not have a clear understanding of what the new labor market model should be.

This nicely reflects the general paradox of today’s AI industry: companies are simultaneously pushing the technology as a tool to help and preparing for mass layoffs.

At work, it became psychologically worse for almost everyone

Changes are already beginning to be reflected both in the labor market and in the emotional state of employees.

If in 2024, 66% of employees said that they felt normal at work, then in 2026 this figure dropped to 44%.

Researchers are increasingly linking this to ongoing anxiety around automation and the uncertainty of the future. A separate term appeared for this condition — AI Replacement Dysfunction (AIRD).

In fact, it is about chronic psychological tension arising from the fear of being replaced by an algorithm.

This is especially evident among office workers who work in areas where AI has already begun to perform some of the intellectual tasks: marketing, analytics, customer support, programming, media and document management.

Society is increasingly wary of AI

Against the background of corporate euphoria, the public attitude towards artificial intelligence is gradually becoming more negative.

According to a March NBC News poll, Americans have come to view AI more poorly than many other contentious topics of public debate.

It is also interesting that Generation Z, the audience that was long considered “natural supporters” of AI technologies, is also beginning to change its attitude towards what is happening.

If earlier young users actively experimented with neural networks and perceived them as a convenient tool, now irritation, fatigue and anxiety related to the impact of AI on careers and the labor market appear more and more often.

The main question is whether AI is really that effective

At the same time, there is still no consensus within the expert community as to how justified the current wave of cuts is.

Many researchers point out that there is still a huge gap between the claims of “automation of the future” and the actual performance of AI.

Yes, neural networks really speed up a number of tasks. But the question of whether they are able to fully replace employees without losing quality remains open.

Some analysts believe that the current frenzy around mass layoffs is not so much the result of a technological breakthrough as the result of marketing pressure and investor expectations that require companies to immediately cut costs.

The labor market is entering a period of instability

However, the general trend seems obvious: business is starting to rebuild the organizational structure under AI even before the final answers about its long-term effectiveness have appeared.

That is why the biggest challenge in the coming years may not be the technology itself, but the consequences of its too rapid implementation.

Companies are trying to speed up automation, employees are afraid of losing their jobs, young professionals are losing entry points to the profession, and society is less and less understanding of what the economy should look like, where algorithms gradually begin to compete with humans not only for physical, but also intellectual labor.