The opinions of contributing entrepreneurs are their own. </p><div>
Key Takeaways
- AI is accelerating white-collar job losses, especially in data-driven roles such as software development, customer support and finance.
- AI is likely both a cause and an accelerator of job losses. Companies are using AI not only to automate tasks, but also as a justification for streamlining their operations and downsizing their workforce.
- Leaders must identify roles where AI increases productivity (not just cost savings), train employees on AI systems, and redefine roles around creativity, strategy, and areas that AI cannot address.
Major business publications and leading news sources are reporting a wave of job losses. Is artificial intelligence the main reason behind this trend? Many experts believe so.
Not long ago, business journalists and others speculated about the extent to which AI would replace or impact jobs. It could be described as the ‘calm for the algorithm’. There is no denying that algorithms have a significant impact.
A recent article in The Wall Street Journal specifically addresses the impact of AI on the white-collar labor market. Amazon and United Parcel Service (UPS) have both announced plans to reduce approximately 14,000 positions each. Retail giant Target is reducing its workforce by 1,800 employees. Molson Coors and General Motors will be issuing a lot of pink slips before the end of the year.
Are we experiencing the first white-collar displacement of the 21st century? It seems so. This leaves many entrepreneurs wondering how many of their key employees will soon be replaced by AI.
Related: Will AI Take Your Job This Year? Staggering statistics show how technology is reshaping the workforce.
Does AI have the most impact on blue-collar or white-collar jobs?
To answer this question, I consulted leading search engines to determine which types of jobs will be most impacted by AI. Interestingly enough, the top search answer was answered by Mr AI himself, or Ms AI herself, if you prefer.
Functions such as data entry, customer service, and software engineering are experiencing job losses due to advances in AI. It’s frustrating for anyone looking for help with a product or service when they encounter AI chatbots instead of a real person to answer their questions or concerns. However, the chatbot doesn’t eat into a company’s healthcare costs, show up late, or demand a six-figure salary.
Think about the AI transitions in customer service like this: There was a call center that used to employ 500 CSRs, now employs 50 AI specialists. Old skills are eroding and new roles that require more technical expertise are growing, albeit at a slower pace.
On the other hand, typical blue-collar positions in construction, healthcare and hospitality are experiencing shortages due to a decline in job applications. While there is a high demand for workers with advanced AI skills, other factors such as the current political climate, economic conditions and worker supply also impact the labor market.
It’s clear that white-collar workers have more reason to fear an AI takeover than their colleagues. When I’m working out in the evening, I often pass by a commercial roofing company and notice that the roofers themselves are not in immediate danger of being replaced by AI. However, employees who design roofing projects may need to update their resumes. You can think of AI’s impact on job replacement in these terms:
- Data-driven jobs are most affected by AI (i.e. software development, finance, customer support)
Low-data jobs (where human interaction is important) remain stable or increase (i.e. healthcare, construction, education, public safety)
Is AI or efficiency the real culprit?
A question I’ve been asking myself recently is whether AI is the cause or accelerator of job losses. The answer is probably both.
Almost every major company uses AI in different ways. Large language models, such as ChatGPT, learn from processing large amounts of data. Assuming this data is accurate, it is clear how trading and coding positions can be negatively affected.
Furthermore, companies could use AI as one of many justifications for downsizing their workforce. This is certainly an intriguing time in corporate America. Managers desire sustainable growth but want to avoid increasing workforces, expecting AI to help achieve this goal.
For example, Goldman Sachs recently issued an internal memo stating that it plans to reduce headcount in the coming year. Similarly, Walmart, a company that typically relies on expanding its stores and workforce for growth, announced that its workforce would remain stable even with expected growth. Just as self-checkout terminals have reduced the number of cashiers on each shift, AI is also replacing some white-collar jobs in corporations.
Next is the ‘bureaucracy factor’. Downsizing bloated departments results in fewer meetings and shorter cafeteria conversations, ultimately reducing the number of employees affected by Monday morning and Friday afternoon slumps. In addition, the decision whether employees should work on-site or remotely becomes less relevant. AI can work from anywhere, allowing companies to save hours on labor without the need for an overtime budget.
AI is undoubtedly having an impact on companies’ workforces. C-suite executives can use several reasons to explain these discounts to their remaining employees. How will AI impact the workforce?
Related: The CEO of the Nation’s Largest Employer Says AI Will Transform ‘Literally Every Job’ at His Company (and Yours, Too)
Will AI impact my industry?
Fortunately for our company, AI won’t replace our employees anytime soon. As I mentioned in previous articles, our team prides itself on direct customer contact. That’s why a real person answers when the phone rings.
What about our direct line employees, the people who transcribe customer audio and video files? Conventional wisdom suggests that software transcription programs are faster, more efficient, and may replace my human transcribers.
Like most companies, our website contains a Frequently asked questions (Frequently Asked Questions) page with detailed information about our transcription services. In fact, our second frequently asked question is: “Why are humans considered more trustworthy than AI and software?” The answer is simple: it’s all about the error rate.
Our answer to the question summarizes the problem: “Humans understand context and can identify a voice when multiple people are speaking over each other. AI and software often have difficulty determining who is speaking and can make incorrect guesses about homonyms and words that sound the same.”
Not being a fan of AI-generated chatbots, I have no plans to replace my exceptional office staff. Until AI transcription programs make significant advances, my US-based human transcriptionists will continue to produce the most reliable transcriptions possible.
What to expect from AI in 2026
Currently, many companies are still in the ‘experimental’ phase of using AI. However, AI is expected to become mainstream by 2026 for both existing and new users.
According to one report from Deloittethree AI trends are expected for 2026:
- Agentic AI autonomous systems that can adapt to changing environments
Physical AI intelligent machines that can communicate with their environment
Sovereign AI ensures that the weights of data and models remain within established limits
With the abundance of AI terminology, it can be challenging to keep track of everything. Here’s a quick overview of these three new concepts:
Agentic AI
Intelligent systems that can quickly adapt to changing environments, make complex decisions, and collaborate with people include agentic AI. This process allows companies or departments to automate both repetitive and multi-step processes.
For example, AI customer service agents can review and resolve support tickets, freeing up human agents to focus on more complex matters. In supply chains, agentic AI can optimize inventory, logistics and purchasing in real time.
Financial services companies like Goldman Sachs will also benefit from this technology through automated portfolio management, fraud detection and regulatory compliance – all without human intervention. Because compliance is critical, AI models must be accurate to avoid significant regulatory and legal issues. As a result, agentic AI will move from pilot projects to wider adoption.
Physical AI
Embedding AI into the physical world can include everything from warehouse robots to smart medical devices. Physical AI is designed to unleash new efficiencies and improve safety in areas where such automation has been limited by cost or complexity.
Imagine robots and AI-powered control systems designed to reduce defects and downtime. A logistics department can use autonomous vehicles and drones to streamline deliveries and warehouse operations. Companies like Amazon and Walmart are already using physical AI effectively, and this trend is expected to increase even more in 2026.
Sovereign AI
As data privacy regulations tighten globally due to the increasing deployment of AI, sovereign AI will ensure that model weights, data, and computing resources remain within specific regional or national boundaries.
For example, our company handles a large amount of healthcare documentation, so we must be HIPAA compliant to protect patient privacy. Sovereign AI enables the processing and storage of patient data locally, in accordance with privacy legislation.
Financial data also requires strict protection. While our primary focus has been on the use of AI in the private sector, governments will also use AI to increase transparency and local control. It is not surprising that public employee unions are expressing concerns about the possibility that AI use by government will reduce their workforce.
Related: Many Employees Fear Being Replaced by AI – Here’s How to Integrate It into Your Business Without Scaring Them
What impact will AI have on your key employees?
While I am open to integrating AI into our business, I do not foresee any headcount losses due to AI implementation. Here are some AI recommendations to keep in mind as the end of the year approaches.
Rather than just reacting to changes in AI, let’s take a proactive approach and present a three-step strategy to key executives:
- Identify roles where AI improves productivity, not just cost savings
Train selected employees on AI systems and workflow strategies
Redefine the roles around human creativity, strategy, and areas that AI cannot address
Don’t forget to use AI to your advantage and embrace new technology. At the same time, encourage key employees to learn or transition to new skills.