Ifo survey: job cuts expected due to AI

In an economic survey, the ifo Institute also asked companies about their assessment of the impact of artificial intelligence on the labor market over the next five years. According to the survey, more than a quarter of companies expect job cuts. In industry in particular, they expect structural change to be accelerated through AI. Only 5.2% of respondents see additional jobs as a result of AI, while two thirds expect no change. According to ifo President Clemens Fuest, companies are currently examining the areas in which AI will bring productivity gains. However, it will be several years before this leads to measurable effects on the labor market.

Klaus Wohlrabe, head of the ifo surveys, goes on to differentiate: should there be a reduction in jobs, the affected companies expect an average decrease of eight percent. In industry, more than a third of companies (37.3%) expect job cuts. At just under 30%, the retail sector is also well above the average for the economy as a whole. In the construction industry, on the other hand, over 80% of companies believe that AI will not change the number of employees. Despite the predominantly negative expectations regarding the impact on the labor market, there are also positive signs. For example, the ifo Institute certainly sees employment impulses: some companies with technology-related services, such as IT or information processing, are expecting significant growth of over 10% in the medium term.

"AI is not only becoming a rationalization tool, but also the starting point for new job profiles," says Wohlrabe. The employment effects of AI are still moderate, but in the longer term it could significantly change the German labor market. The challenge is to translate potential productivity gains resulting from AI into broad prosperity – without creating major upheavals in certain occupational groups.

(avr)