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IMF warns of impact of Artificial intelligence on job markets worldwide

Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), has issued a stark warning regarding the rapid impact of artificial intelligence (AI) on global job markets.

Speaking at the Swiss Institute of International Studies, Georgieva described AI’s effect on labor forces as akin to a “tsunami,” emphasizing the urgency for both individuals and businesses to prepare.

According to Georgieva, AI is expected to impact 60% of jobs in advanced economies and 40% globally within the next two years. Emerging economies are particularly vulnerable, with around 40% of their jobs at risk.

According to news reports, this phenomenon has already begun to manifest, with notable job cuts in media and technology sectors in the U.S. Employment consultancy Challenger, Gray & Christmas reported a rise in AI-related job cuts since May 2023, as companies transition towards AI-driven operations.

In a notable example, IBM—an American multinational technology company headquartered in New York, announced layoffs in non-customer-facing roles, aiming to replace them with AI, impacting up to 26,000 positions, or 10% of its workforce.

The IMF has highlighted similar risks for low-income countries, where 26% of jobs are threatened by AI.

The IMF official reiterated the potential benefits of AI, such as increased productivity, but cautioned against its downsides, including misinformation and growing inequality, calling on policymakers to manage this transition effectively to mitigate social tensions.

The IMF’s concerns align with a PwC report predicting that AI could displace approximately 26% of jobs in China. The global discourse on AI’s impact continues, with tech giants like Google, Microsoft, and Intel conducting studies on AI-related job losses.

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