The week, FOBO - 'fear of becoming obsolete' because of AI - became real for workers and markets

By Weston Blasi and Andrew Keshner

 Massive jobs cuts at Block and a cataclysmic Citrini blog post stoked anxieties - but some CEOs and researchers are skeptical about doomsday scenarios 

 "Fear of becoming obsolete" has become an increasing concern for workers. 

 This past week, Block CEO Jack Dorsey announced that the parent company of Square and Cash App was cutting nearly half its employees - some 4,000 workers - because AI and "intelligence tools have changed what it means to build and run a company." 

 On Monday, Citrini Research put out a blog post laying out a hypothetical, cataclysmic near-future in which AI eliminates white-collar jobs, upending companies and entire industries. The 7,200-word essay from the independent research firm helped spark a selloff in software stocks that wiped out $200 billion in market value. 

 This felt like the week that "FOBO" - the "fear of becoming obsolete" - moved from being a theoretical discussion to having real-world implications. And new research offers a glimpse at the price people are willing to pay in order to manage those fears. 

 Almost two-thirds of workers across the world (63%) say they'd trade a 10% pay increase for a chance to improve their AI and digital skills, according to a new report from Mercer, a human-resources consulting firm. That detail is one part of a wider report showing how employers, investors and workers across the globe are trying to understand what AI's ascent means for their future plans. 

 Four in 10 workers say one of their biggest worries about their future work plans is job loss because of AI. That's up from two years ago, when 28% of workers felt that way, the report said. To be sure, workers acknowledge the ways AI is helping; 8 in 10 employees said AI has made them "more productive and efficient at work." At the same time, 6 in 10 workers say company brass is underestimating AI's psychological toll on staff as it muscles in. 

 There's a lot of truth in worker apprehension: 99% of executives polled said AI will result in some head-count reductions within two years. But there is also a lot of uncertainty over how, exactly, AI will impact jobs and work. 

 Speaking at an investor event this week, JPMorgan Chase (JPM) CEO Jamie Dimon said workers may think that using AI is saving them four hours a day, but it's not necessarily translating into four hours of added value for JPMorgan. 

 "We have an LLM model; 150,000 people use it every week," Dimon said. "They think they're saving four hours a day. That's not in an NPV [net present value] - we don't see the four hours a day in terms of reduced head count like that." 

 And some analysts have argued that Block's (XYZ) decision to slash jobs was a way for the company to blame AI while correcting a reckless postpandemic hiring binge, helping to send its stock soaring. 

 Are AI fears grounded in a myth? 

 The new Mercer report reflects a "growing sense of anxiety" among workers, said Ravin Jesuthasan, who is the firm's global leader for transformation services. But he added that while AI will be able to perform certain tasks that workers traditionally handled, many companies are focused on redeveloping worker skills, instead of making deep cuts that would effectively turn staff salaries and training into a sunk cost. 

 Keith Spencer, career expert at job-search automation platform Sonara, told MarketWatch that while AI is speeding up daily tasks, it isn't fundamentally changing how the work gets done. And until it does, those time savings may not show up in revenue or margins. 

 "AI is largely being layered onto existing work rather than fundamentally redesigning workflows," Spencer said, noting that many professionals are using it to draft emails or presentations, summarize information, analyze data or automate repetitive administrative chores. "Completing tasks faster doesn't automatically mean a company or team is suddenly producing more products or serving more customers," he noted, which would have a more noticeable impact on revenue. 

 Read also: CEOs say they won't add many jobs in 2026. Is a low-hire, low-fire labor market the new norm? 

 In recently published research for the Harvard Business Review, authors Aruna Ranganathan and Xingqi Maggie Ye argued that it's a myth that AI will reduce employee workloads. Instead of shrinking their work, AI will lead to "work intensification" where employees use their newfound tools to tackle a broader scope of tasks, resulting in increased multitasking across the company. 

 A temporary surge in productivity may occur, the authors said, but it can be unsustainable. Over the long term, such practices can lead to "workload creep," cognitive fatigue and a decline in quality of decision-making. In the long term, AI tools meant to save time can make workers feel busier and more stretched because they're taking on more tasks. 

 Preventing these AI-related burnout issues can be tough, but possible. Ranganathan and Ye suggest companies establish a formal "AI practice," where expected interruptions can occur at work. Those can take the form of intentional pauses to assess workflow and sequencing work to reduce AI fragmentation. Having practices in place to ground AI work tasks with human thinking can protect creativity and ensure long-term sustainability 

 For now, some 12% of employees say they are using AI daily at their jobs, according to a Gallup Workforce survey of more than 22,000 U.S. workers, and 26% say they use it multiple times a week - up from 10% and 23%, respectively, year over year. And some tech giants like Amazon.com (AMZN), Google (GOOGL) (GOOG) and Meta Platforms (META) have rolled out AI tools that their workers are now required to incorporate into their daily tasks. 

 Entry-level workers are in a pinch - but for how long? 

 Workers may have to recalibrate their skills looking ahead. But in a sense, they already have a leg up because they at least have a job. Entry-level work has long had its difficulties, but it's in sharp focus now as AI increases its office presence. 

 A Federal Reserve Bank of Dallas report this week noted there are jobs requiring black-and-white textbook knowledge, and there are jobs requiring knowledge from experience. It's essentially the difference between book smarts and street smarts. 

 Street smarts may hold the upper hand for now. Early data show wages are increasing for AI-exposed jobs that "place a high value on a worker's tacit knowledge and experience," wrote J. Scott Davis, an assistant vice president in the Dallas Fed's research department. 

 The challenge is finding ways to give new workers valuable experience when AI is increasingly handling the textbook work that used to be meant for entry-level employees, Davis said. 

 Businesses may determine it's not an effective move in the short run to keep giving new employees textbook grunt work as they slowly build their experience. 

 "Of course, leaving new employees off the job ladder is not sustainable in the long run. In the long run, AI adoption will require rethinking how entry-level employees gain experience on the job," Davis wrote. 

 Job-market conditions for recent college graduates deteriorated at the end of last year, according to the Federal Reserve Bank of New York. The fourth-quarter jobless rate for new grads rose to 5.7%, from 5.3%, in the third quarter, while the underemployment rate climbed to its highest point since 2020. 

 Underemployment counts as working in a job that generally does not require a college degree, researchers said. 

 -Weston Blasi -Andrew Keshner 

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02-28-26 0830ET

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