Goldman Sachs analysis points to longer job searches for workers laid off in AI-exposed roles

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Highlights

Goldman Sachs found workers most likely displaced by AI in 2025 took about a month longer to find new jobs than other laid-off workers.
Affected workers were 10 percentage points more likely to remain unemployed after a year, with three-quarters moving to equally or more AI-exposed jobs in 2025, up from just over half in 2023.
Workers older than 55 displaced from shrinking occupations suffered earnings losses of over 10%, while recent graduates saw unemployment rates rise to 5.4% and underemployment reach 42%.

Goldman Sachs findings on AI-linked displacement

As reported by Axios, citing Goldman Sachs, workers most likely displaced by AI in 2025 took about a month longer to find new employment than other laid-off workers. Economist Pierfrancesco Mei wrote in a new note that the pattern resembles earlier technological shifts, when workers whose skills lost value often struggled to re-enter the labor market and were pushed into less-skilled roles.

Mei's analysis covers more than 15,000 workers who lost jobs between 2016 and 2025. Because there is no definitive count of AI-related layoffs, the research estimates which job losses were most likely tied to AI by looking at workers' occupations, industry AI adoption rates and whether positions were eliminated.

Those workers were about 10 percentage points more likely to remain unemployed a year after losing their jobs. Among workers from AI-exposed roles who did find new jobs in 2025, roughly three-quarters moved into occupations with similar or greater AI exposure, up from just over half in 2023.

Risks for older workers and new graduates

Goldman Sachs says AI may eventually create new categories of work, but those openings could take years to appear. In the meantime, the disruption appears especially acute for older workers, who have historically suffered larger income losses after displacement from declining occupations.

An earlier Goldman Sachs analysis this year found that workers older than 55 who were displaced from shrinking occupations suffered earnings losses of more than 10% when they found new full-time jobs, while workers younger than 35 saw almost no losses. In the current AI-related data, workers under 35 most likely displaced by AI took about three weeks longer to find full-time jobs than other laid-off workers their age, while the gap widened to five weeks for those 35 and older.

Recent graduates are also showing signs of strain in the labor market, raising questions about whether AI is replacing some entry-level work. Data updated Monday by the Federal Reserve Bank of New York show the unemployment rate for recent graduates averaged 5.4% in the third quarter, compared with 4% for all workers, and that gap has roughly doubled since 2019. Underemployment is also increasing, with about 42% of employed recent graduates in jobs that do not require a degree, up 1 percentage point from before the pandemic.

In our earlier article, we examined how the unemployment gap between young adults with and without college degrees in the New York City area has narrowed as hiring weakens and AI pressures entry-level white-collar roles. We noted that recent data even showed degree holders briefly posting unemployment rates on par with—or slightly above—non-degree peers, intensifying the debate over the value of a degree as AI reshapes skill demand.

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