Mumbai, January 21: International leaders and top executives have issued a stark warning regarding the rapid integration of Artificial Intelligence, stating that the technology is hitting the global labour market "like a tsunami." Speaking at the World Economic Forum in Davos, Switzerland, on Tuesday, Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), highlighted that while AI could boost economic growth by 0.8% in the coming years, most countries and businesses remain unprepared for the scale of disruption.

The warning comes as employee sentiment shifts from curiosity to concern. According to preliminary findings from Mercer’s Global Talent Trends 2026 report, which surveyed 12,000 people worldwide, worker fears regarding job displacement have jumped from 28% in 2024 to 40% this year. Analysts at Deutsche Bank further noted on Tuesday that anxiety over the technology is expected to escalate from a "low hum to a loud roar" throughout 2026, manifesting in increased lawsuits and regulatory debates. Layoffs in 2025: AI-Driven Job Cuts Surge as Companies Like Amazon Trim Workforce Ahead of 2026.

AI Layoffs Rise Globally

The surge in anxiety follows a year of significant restructuring across the tech and corporate sectors. Data from consulting firm Challenger, Gray & Christmas revealed that AI was a contributing factor in approximately 55,000 job cuts in the US during 2025. Major industry players have openly cited the technology in their downsizing efforts; Amazon cut 15,000 positions last year, while Salesforce CEO Marc Benioff noted that 4,000 customer support roles were eliminated as AI was already performing 50% of the workload.

Other major firms, including Accenture and the Lufthansa Group, have also referenced AI during restructuring processes. However, some experts caution against "AI redundancy washing," a term used by Deutsche Bank analysts to describe companies potentially blaming AI for layoffs that are actually driven by general market uncertainty or broader economic factors. Sander van’t Noordende, CEO of Randstad, argued in Davos that it is still too early to definitively link all recent job losses to the technology.

Investor Pressure for Workforce Upskilling

Despite the fears of displacement, the focus for 2026 is shifting toward "The Great Adaptation." Mercer’s research found that an overwhelming 97% of investors now say their funding decisions will be negatively impacted by companies that fail to systematically upskill their employees. Investors are increasingly looking for "optimal combinations" of humans and machines, indicating they may divest from organisations that do not provide comprehensive AI education to their staff.

Ravin Jesuthasan, a senior partner at Mercer, explained that the trend of "AI-washing" annual reports to get a stock bump has ended. Instead, the market is now demanding clear evidence of how firms are bringing their workforce along with the technological transition. While a Stanford study indicated a 16% decline in employment for recent graduates in AI-exposed roles, positions for experienced employees have remained relatively stable, suggesting that mid-career professionals may be more resilient to the initial wave of automation.

Preparation for Economic Growth

The IMF maintains that AI remains a primary driver for future economic prosperity, provided that governments and corporations act quickly to address the skills gap. Georgieva emphasised that the immediate priority for nations must be identifying and teaching the new skills necessary for an AI-integrated economy. Meta Layoffs 2026: Mark Zuckerberg’s Company Fires Over 1,000 Employees From Reality Labs Division; Affected Share Experience on LinkedIn.

As the "tsunami" of AI continues to move through the labour market, the psychological impact on workers remains a critical concern. Mercer’s report suggests that 62% of employees feel their leaders are currently underestimating the emotional toll of this transition. For 2026 to be a year of successful adaptation, experts agree that businesses must move beyond technical implementation and focus on the human element of the AI revolution.

(The above story first appeared on LatestLY on Jan 21, 2026 09:25 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).