Contrary to Dominant Narratives, the Job Market Has Not Shrunk Due to Artificial Intelligence (AI)
The world is witnessing a shift towards a new era of work, rather than a contraction of the job market due to AI. This is according to a new report by LinkedIn on the global labor market. The report reveals a global slowdown in hiring, primarily due to economic uncertainty and changes in monetary policy.
A Challenging Labor Market
This persistent gloom has created a market dynamic characterized by a global workforce that is restless and underutilized. The pressure is concentrated in advanced economies, where hiring remains 20-35% below pre-pandemic levels, while emerging markets like India (+40%) and the United Arab Emirates (+37%) are maintaining their momentum. Furthermore, 52% of people report looking for a job in 2026, while nearly 80% feel unprepared to find a new one.
The Rise of AI-Driven Job Creation
The results indicate that labor market growth is pivoting towards the current wave of AI investments. While AI has affected some jobs in a localized manner, it is also creating large-scale demand in data centers and 1.3 million new roles such as AI engineers, deployment engineers, and data annotators. AI is being integrated into almost all functions, and the skills landscape is transforming rapidly, leading to an increase in job offers requiring AI proficiency.
The Value of Human Skills
As a result, employers are placing even more value on human skills like empathy and personal connection. The true advantage comes from a workforce that combines ease with AI and typically human strengths. To succeed in the current market, leaders must make skill development a pillar of their talent strategy, helping employees develop the skills needed to thrive in an AI-transformed work world.
A Shift in Worker Behavior
This change in the job market is also reflected in worker behavior. In major economies, more than half of professionals now prefer specialized trades to office jobs. Among Gen Z, this preference is even more pronounced, with nearly 60% considering technical trades as more valuable career options. Together, these data points show a workforce turning towards practical, skills-based work, as AI continues to redefine job creation and choice.
Key Takeaways
- The job market is not shrinking due to AI, but rather evolving towards a new era of work
- The global workforce is restless and underutilized, with pressure concentrated in advanced economies
- AI is creating new job opportunities in data centers and related fields
- Employers value human skills like empathy and personal connection
- Workers are shifting towards specialized trades and skills-based work
- Leaders must prioritize skill development to help employees thrive in an AI-transformed work world
