The International Monetary Fund (IMF) has warned that artificial intelligence will reshape the global labor market on a massive scale.
Speaking at the 2026 IMF-World Bank Annual Meetings in Bangkok, Managing Director Kristalina Georgieva described AI as a “slow-moving tsunami” that could affect around 40 percent of jobs worldwide.
She said the impact will not be limited to outright job losses. She stated that AI is expected to augment some roles by boosting productivity, downgrade others by reducing their complexity or pay, and eliminate a portion of positions.
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In her words,
“AI is a slow-moving tsunami, but a tsunami nonetheless. The impact over time on jobs globally we estimate to be around 40 percent of jobs either augmented, downgraded, or eliminated. AI, love it, hate it. It’s already here. Love it, hate it, or fear it. It is here, and we are already seeing the first wave of impact. People to worry about, first and foremost, are young people that are coming into the labor market.
“Normally, they would get into these routine, repetitive jobs and then grow up the ranks. But if they’re gone, I don’t think any young person wants to be a barista in a coffee shop as their professional future. It is a transformative technology. It so completely changes how we work, how we live. Traditionally, governments would generate revenues by taxing mostly people. If AI changes the structure of the labour market, then there is less labour, more capital, so what do we tax? How do we generate the revenues?”
“Get AI to do all the stuff we don’t want to do and let us enjoy the things we love to do. We cannot today imagine what exactly the world of work will be five years from now. But we can be disciplined and carefully assess what is happening, and then draw lessons, but most importantly act on them now.”
The IMF director further emphasized that the effect of AI will be felt unevenly across the world. In advanced economies, roughly 60 percent of jobs face exposure to AI. In low-income countries, the figure drops to about 23 to 26 percent, largely because the technology has not yet spread as widely there.
Georgieva paid particular attention to younger workers. She noted that many of the routine and repetitive entry-level jobs that traditionally help graduates gain experience and climb the career ladder are among the most vulnerable.
Without those starting points, young people may struggle to build the skills and track records needed for higher-skilled roles later on. At the same time, some lower-paying jobs in areas such as data-center construction and related services are already expanding as companies race to build the physical infrastructure that AI requires.
Early evidence from the United States shows the shift is already underway. About 10 percent of jobs now demand advanced AI skills, and those positions generally offer higher pay.
Meanwhile, routine roles continue to shrink. The IMF stresses that the net effect on employment in some studied areas has so far been positive, but much of the new growth is concentrated in lower-wage work.
As businesses accelerate AI adoption, the central question is no longer whether the technology will change employment, but how quickly the transition will happen, which workers will bear the greatest costs, and whether the jobs created will adequately compensate for those lost.
The displacement of workers through AI is no longer merely a future possibility. Companies are already using the technology to reduce their dependence on human labour in specific functions.
Despite the disruption, Georgieva pointed to economic upsides. Heavy investment in AI infrastructure is helping support global growth near 3 percent and could add between 0.5 and 1 percentage point to growth in advanced Asian economies, with smaller but still meaningful gains in emerging Asia.
She framed the technology as inevitable, saying societies must prepare workers for the changes rather than try to stop them.
Unlike earlier waves of automation, which primarily affected manual labour and repetitive industrial tasks, modern AI can perform activities associated with highly educated professionals.
Accountants, financial analysts, legal assistants, software developers, researchers, writers and administrative professionals are increasingly working alongside tools that can automate parts of their responsibilities.
The core challenge, according to the IMF, is ensuring that the productivity gains from AI translate into better living standards and meaningful work for more people.