Economist Warns of 'Massive' Job Losses as AI Productivity Gains Accelerate
Nouriel Roubini, the economist who predicted the 2008 housing crisis, said AI will trigger significant job cuts across the economy over the next few years, even as it creates some near-term positions in infrastructure and startups.
"Over the medium long term, there'll be massive amounts of labor shedding," Roubini said in an interview. The NYU professor has held senior roles at the White House Council of Economic Advisers, the Treasury Department, and the International Monetary Fund.
Job losses from AI are already visible. Block, Amazon, and Meta have announced major layoffs. A Morgan Stanley survey of employers across five sectors most exposed to AI adoption found a 4% net reduction in jobs, with early-career employees bearing the brunt of cuts.
The Short-Term Delay
Roubini distinguished between immediate and long-term effects. In the short run, AI will increase labor demand. But aging populations and migration restrictions are currently masking productivity-driven job losses at the aggregate level.
"We're already seeing it right now among some of the more advanced Big Tech in Magnificent Seven firms," Roubini said, referring to major technology companies.
Wall Street Pressure Building
Finance leaders expect the pressure on operating expenses to intensify. Jeremy Allaire, co-founder and CEO of Circle, predicted intense scrutiny from Wall Street by late 2026 as companies reveal which ones are optimizing AI adoption effectively.
"I do think it will impact the labor market in the near term," Allaire said.
For finance professionals, understanding AI's effect on your industry matters now. AI for Finance resources can help you understand how these shifts will reshape financial roles. Data analysts particularly should explore how AI is changing their function as companies optimize their operations.
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