A historic labor shock may be about to hit the job market.
That’s according to London Business School professor Ekaterina Abramova.
She said AI is advancing so quickly that it could trigger mass layoffs long before new jobs emerge to replace them — a mismatch that has historically fueled social unrest.
Abramova, who studies technology-driven economic transitions, said the past three years of AI advances mark a sharp break from earlier waves of mechanization.
In past eras — from 18th-century textile automation to late-20th-century manufacturing decline — the impact was mostly gradual and largely contained to individual sectors, she said.
But AI is different: “A single AI model can displace thousands of cognitive jobs across multiple industries overnight,” she told Business Insider.
A wave of job losses that outpaces new opportunities
Abramova expects layoffs to outstrip new job creation over the next five to 10 years, especially without aggressive retraining efforts.
While the exact number of AI-related layoffs is unknown, several major companies have already cited AI as a reason to reduce head count or to announce job cuts.
New AI-related roles often require skills or credentials that many displaced workers lack, Abramova said, and entry-level positions — such as junior developers, analysts, and customer support staff — are already among the most vulnerable.
Peter Orszag, CEO of Lazard and former director of the Office of Management and Budget under President Obama, sees a similar risk.
Speaking on CNBC’s “Squawk Box” this week, Orszag said that if AI delivers on its promise, there’s likely to be a jobs crisis.
“Labor markets deal well with small problems that happen fast or big problems that happen slow. They do not deal well with big shocks that happen quickly,” he said.
Why rapid AI change risks social instability
Abramova said that the social risks extend far beyond unemployment numbers.
“History shows social strain emerges when the pace of economic change overtakes institutions’ capacity to support displaced workers,” she said.
She pointed to the UK’s Enclosure Acts, which displaced tens of thousands of small farmers from common land, sparking riots and mass migration, and to the 1980s coal pit closures, which wiped out mining communities almost overnight and triggered years of strikes and political upheaval.
Business leaders are divided over AI’s impact on jobs, with Anthropic CEO Dario Amodei and Ford CEO Jim Farley warning of widespread white-collar displacement, while Elon Musk, JP Morgan’s Jamie Dimon, and OpenAI’s Sam Altman have predicted varying outcomes, ranging from significant disruption to long-term prosperity.
Others, such as Nvidia CEO Jensen Huang and Yann LeCun — Meta’s outgoing chief AI scientist — say AI will transform work rather than erase it.
“It’s very likely that the companies that use AI first, that use robotics technology first, will be the most successful first, and they will end up hiring more people,” Huang said in late October.
“You’re going to lose your job not to somebody — not to a robot, you’re going to lose your job to somebody who uses a robot. You’re going to lose your job to somebody who uses AI,” he added.
A destabilizing transition — but not an inevitable one
If governments and employers fail to prepare, Abramova said she expects widening inequality, persistent unemployment, falling consumer demand, rising political anger, and even expanding surveillance as leaders try to contain discontent.
In extreme cases, she warned, democratic norms can erode.
But she also said that the worst outcomes aren’t inevitable.
The alternative is worker-augmenting AI: systems where machines handle data-intensive tasks while humans retain judgment, ethics, and client relationships. That shift will require regulatory incentives that reward firms for responsible oversight, not just rapid headcount reduction.
“Without major support,” Orszag said, “many displaced workers risk long-term underemployment.”
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