CIOs are rushing to implement AI across operations and spending more than ever on pilots to advance adoption. As tools become more commonplace and AI skills become more desirable, employees are concerned that they’ll be displaced.

A third of organizations expect that AI will cause workforce reductions in the next year, according to the 2026 AI Index Report published Monday by the Stanford Institute for Human-Centered AI. However, the potential effects are unlikely to be as drastic as employees believe, given most enterprise adoption efforts are still underway.

The consequences of AI adoption on the workforce isn’t showing evenly, as younger workers in early-career roles — and those in service operations, supply chain and software engineering — were the most exposed.

Employment for software developers ages 22 to 25, for example, fell nearly 20% from 2024, the report found. The Stanford HAI institute produced the report with data from global research partners.

AI displacement
Employment reductions caused by AI have steadily been a concern for the last few years, said Vanessa Parli, managing director of programs and external engagement at Stanford’s HAI.

The index found that nearly two-thirds of Americans said they expect AI to lead to fewer jobs in the next 20 years. But statistics show the impact may not be as big, at least in the immediate future, she said.

“We’ve seen in the past that the expectation for headcount reductions actually end up being bigger than what folks actually end up reducing,” Parli said.

Large corporations have invested in AI at faster rates than smaller companies, with global corporations spending nearly $582 billion in 2025, more than doubling year over year. In 2025, 58% of employees reported using AI on a semiregular basis, and nearly two-thirds said they expect it to lead to fewer jobs overall in the future.

But AI adoption is still in early stages for most companies, Parli said, so it’s challenging to measure how jobs will change or if the technology will replace roles altogether.

“People are still experimenting,” Parli said. “It seems like we will see disruption, but to what extent and to what occupations, I think is yet to be seen well.”

Desirable skills

AI skills are becoming more important to employers, with mentions of generative AI more than doubling from 2024 to 2025, the report found.

The information sector led in its demand for AI skills, with 13.2% of jobs looking for AI skills in 2025 compared with 7.8% in 2024. But sectors with historically low AI adoption, like transportation and warehousing, also showed year-over-year increases.

The skillsets with faster growth were around building and operating AI systems at scale. Agentic AI capabilities also emerged as a new skillset in 2025, and job demand shifted from seeking a general familiarity with chat-based tools, to coordinating operations and deploying task-oriented systems.

Job seekers are clued into the change, Parli said.

The report found that AI agents, prompting, productivity and strategy were among the fastest growing AI skills added to user profiles in the U.S. in 2025.

“The difference in what people’s jobs are is changing more quickly now than it has for past technologies like computers or the internet,” she said.