AI Jobs Disruption Is Here. What It Means For The S&P 500 And You.

For the first three years of the ChatGPT era, generative AI’s upside held the limelight as megacap tech stocks carried the S&P 500 to lavish gains. The downside of artificial intelligence — broad job displacement — looked like a day over the horizon. Now that day of AI jobs reckoning has arrived, seemingly out of nowhere.

Investors suddenly are treating AI jobs destruction and industry disruption as clear, if not quite present, dangers. Wealth managers and commercial real estate and are among the industries rocked by stock sell-offs based on AI-enabled competition and a potential future with far fewer office workers.

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Fear has spiked despite apparent improvement in incoming jobs data. The Federal Reserve upgraded its view of the labor market on Jan. 28. Meanwhile, rate-cut odds fell after the Feb. 11 jobs report showed much stronger hiring in January.

Yet growing evidence suggests that the AI jobs impact has reached an inflection point. The unemployment rate for recent college graduates had already climbed to a 12-year high, excluding the pandemic, in the fourth quarter.

Now the impact is spreading to experienced workers. A growing list of companies, including Amazon (AMZN), Walmart (WMT) and Wells Fargo (WFC), are freezing or shrinking their payrolls in anticipation of AI productivity gains. As artificial intelligence grows more capable, insurance, logistics and banking are among industries that have begun integrating it more deeply into business practice, enabling the automation of more tasks with increasing complexity.

AI Jobs Disruption Begins

“I think that 2026 is going to be the year that AI starts to dramatically change the way that we work,” Meta Platforms (META) CEO Mark Zuckerberg told analysts on the company’s Jan. 28 earnings call. “We’re elevating individual contributors and flattening teams. We’re starting to see projects that used to require big teams now be accomplished by a single very talented person.”

One global insurance firm also raised eyebrows by committing to the shift to AI. “So far, most insurers have carefully framed AI as a ‘co-pilot’ or ‘augmentation’ tool, preferring to keep humans in the loop” for underwriting and claims processing, Deutsche Bank analyst Cave Montazeri wrote in a Dec. 16 note. “Chubb (CB) has broken an industry taboo by explicitly forecasting a 20% reduction in headcount from the use of AI.”

On Dec. 8, the S&P 500 giant mapped out its path to a digital transformation of all facets of its business. Chubb expects 85% of underwriting and claims processing will be “no-touch” in three to four years.

Logistics manager C.H. Robinson Worldwide (CHRW), another S&P 500 member, said on its Jan. 29 earnings call that it has more than 30 AI agents that handle various business functions. That’s allowed employee headcount to fall 3.8% since Q3 and 12.9% from a year ago. The company says AI now saves 350 work hours a day alone by handling 95% of checks on missed pickups by less-than-truckload carriers. That’s a common issue because such trucks handle freight from up to 20 different shippers.

Previously, C.H. Robinson had the capacity to respond to just 60% of requests for freight quotes, taking around 17 minutes per response. Now AI agents can handle 100% of requests in 32 seconds.

The job cuts have come as the Cass Freight Index, a measure of North American shipment volume, has seen four straight down years, sinking to its lowest level since the 2009 financial crisis. But the next time volume picks up, C.H. Robinson won’t have to increase staff, CFO Damon Lee told analysts. “A heavy human touch process before is now a light human touch process today,” he said.

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Jobless Economic Growth?

Goldman Sachs Chief U.S. Economist David Mericle worries that jobless growth could befall the U.S. more broadly in 2026. The U.S. economy has shown resilience, and most analysts expect it will stay on firm footing this year. Mericle’s base case has the unemployment rate moving sideways around 4.5% this year vs. 4.4% in December. However, he says the labor market could fail to gain traction, similar to the jobless recovery of the early 2000s, pushing unemployment higher.

The culprit may not be a big jump in AI-related layoffs but a belief they’re coming. “An increased reluctance to hire in anticipation of AI being able to replace workers in the near future would represent a new obstacle to maintaining full employment,” Mericle wrote.

That’s not the consensus, nor the view of the Fed. “Downside risks to employment have diminished,” Chairman Jerome Powell said on Jan. 28.  After the Fed cut its key interest rate on Dec. 10, Powell said AI was “probably part of the story” behind the weak job market but “not a big part.”

Jobless Claims: Hiding Bad News?

“You can’t miss the big announcements of layoffs and also companies saying that they’re not going to hire anybody for a long time, and they cite AI — that’s all clearly happening. At the same time, people are not filing for unemployment,” Powell said. He noted relatively few workers are putting in new claims for jobless benefits or continuing to receive benefits.

The four-week average of initial claims, generally a reliable leading indicator of the labor market, stands at a very low 219,000 through last week.

But the data may be sending a false signal, Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, has warned.

“Much of the rise in unemployment over the last two years has been driven by young people, who have little prior work experience and so are mostly ineligible to claim” jobless benefits, Tombs wrote on Jan. 29. He also notes that a growing share of unemployed workers have been out of work for at least 27 weeks. That means they’ve exhausted their eligibility for up to 26 weeks of benefits.

Younger workers are the canaries in the coal mine — “harbingers of more widespread effects of AI” on the labor market, Stanford professor Erik Brynjolfsson and colleagues concluded in a study based on ADP data through September 2025. Among their findings: “Employment for software developers aged 22-25 declined nearly 20% compared to its peak in late 2022.” Hiring of young workers into customer-service roles also faltered.

But the Stanford researchers found that employment for more experienced workers in AI-exposed fields continued to grow. That suggests workers with tacit knowledge of the ins and outs of a job may be harder to replace.

“Every time we have a wave of technology, we think, ‘Oh, this could put a lot of people out of work. What are they going to do?’” Powell said in December. “In the past, there’s always been more work and higher productivity, and incomes have risen. What will happen here? We’re going to have to see.”

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Fewer Openings Signal AI Jobs Impact

This time could be different. Job openings have tumbled below the number of unemployed for the first time since 2017, excluding the pandemic peak. Job openings in two AI-exposed sectors, finance and insurance, and professional and business services, plunged 25% in December. They’re at their lowest level since 2014, except for April 2020.

Pantheon’s Tombs sees scarce job openings as “potentially suggesting that AI is persuading a rising proportion of businesses to pause on new hiring.”

New job postings on Indeed Hiring Lab are well below pre-pandemic levels in AI-exposed sectors such as data and analytics (-31%), marketing (-25%), software development (-15%) and accounting (-13%).

If companies think they’re on the cusp of massive AI productivity gains, it’s not surprising that they would slow hiring.

Banking Giants Look To Curb Headcount

“Based upon what we know today, we expect headcount will trend down by about 10% over the next five years or so, even as the business grows by another more than 25%,” Marianne Lake, CEO of JPMorgan Chase’s consumer and community banking division, said last May. And she expects to exceed the implied 40% productivity gain “as the tools and capabilities just keep getting better and better.”

Dutch banking giant ABN Amro (ABN) said in November that it plans to cut 5,200 jobs, or nearly 20% of its staff, by 2028, as it increasingly relies on AI for customer service and anti-money laundering compliance. Morgan Stanley said in December that it expects the largest European banks to lay off over 200,000 workers by 2030.

Goldman Sachs (GS) has been working with Anthropic engineers to build AI agents, CNBC reported recently. They could soon handle accounting for trades and transactions, as well as client vetting and onboarding, though consideration of layoffs is “premature.”

Goldman CIO Marco Argenti said the investment banking firm was “surprised” that the AI agents could work through complex nonprogramming tasks and achieve “the same level of automation and the same level of results that we’re seeing on the coding side.”

Will Government Need To ‘Save Society’ From AI Fallout?

JPMorgan (JPM) CEO Jamie Dimon, speaking at the World Economic Forum in Davos, Switzerland, warned that AI disruption could move “too fast for society.” In that case, government and business would have to collaborate to retrain people. He didn’t rule out limiting mass layoffs “to save society.”

Fed Chairman Powell, though not predicting serious AI jobs fallout, said that U.S. monetary policymakers “don’t really have the tools to address the concerns that might arise.” That echoed his Covid-era statement that the Fed had “lending powers, not spending powers.” In other words, the burden for financing economic recovery would fall to the federal government.

Because the pace of change facing the labor market is so much faster than in prior technological revolutions, the “short-term shock will be unprecedented in size” in the best-case scenario, Anthropic CEO Dario Amodei wrote last month.

“My prediction for 50% of entry level white collar jobs being disrupted is 1-5 years, even though I suspect we’ll have powerful AI (which would be, technologically speaking, enough to do most or all jobs, not just entry level) in much less than 5 years,” he wrote.

Anthropic, Other AI Startups Ramp Up Capabilities

Labor force disruption gathered pace with Anthropic’s Jan. 13 release of Cowork, or “Claude Code for general computing.”

Anthropic’s “Claude Code is the inflection point” for AI agents, the SemiAnalysis research firm declared in a Feb. 5 report. “Information work itself is going to be automated like Claude Code has automated software engineering.”

Just two years ago, AI models could barely write a line of code, Anthropic’s Amodei said. Yet Claude Code did 100% of the coding for Cowork in just 10 days.

For $20 a month, Cowork can put together and optimize charts for a presentation, plan a travel itinerary, create spreadsheets from receipts and much more. You provide the objective and it figures out how to get there.

That has helped trigger a slide in IT services and software stocks since October, including Microsoft (MSFT), Palantir (PLTR) and AppLovin (APP). The sell-off intensified on Feb. 5, when Anthropic released versions of Cowork geared to specific tasks, such as creating legal documents, handling customer service requests and sales.

While coders have led in adopting AI, the speed of job disruption depends on how fast diverse industries catch on. In December, consulting firm Accenture said 30,000 of its employees would train on Claude as part of a partnership with Anthropic to help enterprises move “at speed” from AI pilots to large-scale adoption. The recent stock market fallout and threat of a wide variety of firms themselves being disrupted by startups also will push the pace of jobs disruption.

Last week, startup Altruist released an AI-enabled service that can devise personalized tax strategies by analyzing clients’ tax and financial statements without any data entry. That slammed shares of brokers and wealth managers, including Charles Schwab (SCHW), Ameriprise (AMP) and LPL Financial (LPLA). The news also appeared to hit banking titans such as JPMorgan and Wells Fargo.

Artificial Intelligence Stocks

AI Reduces Higher Education Return?

Financial services companies also face a different kind of AI threat: credit risk.

“In the near term, we see elevated cyclical credit risk as college graduates face a tougher job market,” JPMorgan analyst Richard Shane wrote on Jan. 12, while downgrading student loan provider SLM (SLM) to underperform. “Over the longer term, we believe SLM’s business model faces structural challenges, as the value of a college degree may come into question with increasing AI-drive disruptions, potentially leading to diminishing returns on higher education.”

The unemployment rate among college grads age 22 to 27 hit 5.7% in the fourth quarter, New York Fed data show. That’s up from 4% at the end of 2022. Meanwhile, the share of recent college grads working in jobs that don’t require a degree has climbed to 42.4%. That adds up to 48.1% being either unemployed or underemployed. In short, the nation has gone from a historically tight job market for new college grads to one more typical of a deep recession.

High-Skill Blue-Collar Demand

At the same time, “there’s a huge shortage of electricians, plumbers, welders, millwrights and pipe fitters in this country,” William Blair analyst Tim Mulrooney told Investor’s Business Daily. Mulrooney covers S&P 500 HVAC and electrical contractor Comfort Systems (FIX) and other blue-collar services firms.

“In a world where we don’t have enough electrons to feed the data centers we want to build, we’re also going to have to build a bunch of power plants,” he said. The U.S. is now prioritizing “all of that physical infrastructure that we hadn’t been investing in,” like semiconductor manufacturing, battery, nuclear power and gas turbine plants.

“All of my stocks are up 10% to 15% year to date, compared to the software companies that are down 20% to 30%,” Mulrooney said. One clear message from markets: “Blue-collar workers are probably the last bastion of disruption from AI.”

Enrollment in undergraduate certificate and associate programs has climbed 28% since 2021 to 752,000, the National Student Clearinghouse Research Center reported last month. Undergraduate enrollment in community colleges grew 3% in 2025 vs. a 1.4% rise at public four-year colleges and a 1.6% decline at private nonprofit four-year colleges.

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Labor Supply-Demand Balance

Economists estimate that the U.S. only needs to add 10,000 to 30,000 jobs a month to keep up with growth in the labor force amid tighter immigration controls and baby boomer retirements. The buildout of AI data centers and other physical infrastructure could provide support to the labor market, which lost jobs last year outside of health care and social services.

Yet any stabilization is likely to be fleeting. The Associated Builders and Contractors trade group says the construction industry needs 349,000 new workers, not including retirements, to meet demand in 2026. But Forrester Research recently predicted that AI and other automation will kill 10.4 million jobs by 2030. The services sector accounts for more than 70% of U.S. employment, so infrastructure investment can’t fill the hole that AI jobs displacement may leave.

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‘The Disruptor, Not The Disrupted’

The sudden conviction that AI is revolutionizing productivity and promises major labor market fallout should at least relieve one investor concern, wrote Deutsche Bank strategist Adrian Cox. If that’s the case, then worries about AI being an overhyped investment bubble should abate. “Both cannot be true.”

However, the market fallout appears overdone in some cases, Cox says. “Some of the software-as-a-service companies caught up in the sell-off have deep moats of entrenched workflows and data that cannot be easily replicated by a vibe-coded user interface.”

Logistics stocks tumbled last week after upstart Algorhythm, a self-styled “leading AI technology company” with an $8 million value and a history of making karaoke machines, released a white paper claiming massive efficiency gains for trucking clients in India. After getting caught up in the sell-off, C.H. Robinson put out a statement declaring that the company is “the disruptor, not the disrupted.”

The pressure will be on every company to make the same case. For workers in affected industries and roles, that means disruption coming from within as well as from the competition.

Even though markets may be skewering some stocks unfairly, the recent volatility is an important turning point. The Fed’s latest survey of bank loan officers found they are “less likely to approve loans to firms adversely affected by high AI exposure.” The uncertainty about AI’s impact can’t help but affect major decisions, including hiring, across the economy.

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