IMF report indicates AI reduces labor demand in vulnerable Asian professions by nearly 10%

For many workers, work is not only a source of income but also a guarantee of financial stability, an opportunity for career growth, and a basis for future planning. However, the implementation of artificial intelligence (AI) is transforming companies' working methods and hiring processes. As a result, employees may face increased competition for fewer vacancies, and demanding a salary increase, even while keeping their job, may become more difficult.

Philip Lane, Chief Economist of the European Central Bank, warned that AI is capable of weakening workers' bargaining power. This could put pressure on wage growth rates and lead to a decrease in the share of labor in overall income. Although Lane's warning mainly concerns Europe, similar issues are arising in the Indian labor market. In India, there is growing demand for AI-related skills, while opportunities for entry-level specialists and other employees are increasing slowly.

Amid these changes, a key question arises: will workers be able to maintain their ability to demand better pay, promotions, and improved working conditions?

In September 2026, the growth of the white-collar market in India was uneven. Hiring of specialists related to machine learning and AI increased by 20% year-on-year, while overall hiring in the white-collar sector grew by only 1%. Hiring among newcomers with zero to three years of experience also increased by just 1%. Meanwhile, there was a 2% decline in hiring specialists with four to seven years of experience.

This data indicates that despite the slowdown in the overall hiring pace, companies favor candidates with narrow, specific skills. This may affect not only job searching. If positions are being cut in a certain area, employees have reduced chances either to change companies for better pay or to demand a higher salary based on another offer.

Nevertheless, these hiring figures themselves do not prove that AI is weakening workers' bargaining power. They point to ongoing changes that must be considered as companies revise their skill and role requirements.

India's experience also shows that the impact of AI cannot be viewed solely as a story of layoffs. According to a Nomura report, first received by Bloomberg News, 83,100 AI-related vacancies were registered in India. In comparison, 31,921 cases of layoffs and departures were recorded.

These figures show that the process of creating new jobs through AI and the influence of AI on existing jobs can happen simultaneously. However, new roles may require completely different qualifications and experience than those being automated. For example, an employee whose role is related to customer support cannot automatically apply for an AI engineer position after their work is automated. This gap in skills and qualifications can hinder some employees' access to new opportunities, even if companies are actively hiring for certain positions.

A recent report on the operation of AI data centers also mentions a growing demand for electricians, construction workers, and other technical specialists supporting AI infrastructure. This suggests that AI is influencing not only software developers or tech companies but is also changing demand across various professions.

The impact of AI on wages is also an important part of this discussion. Companies use AI to increase speed and production. Under such conditions, they may focus more on employees' performance results, their ability to interpret responses from AI, and their decisions when using technology.

The question is: will the benefits of increased productivity be distributed among employees in the form of higher wages, or will they primarily go to companies through cost reduction and increased output?

According to a recent global workforce report by Workday, 28% of business leaders surveyed expected staff reductions due to AI. At the same time, 40% believed that AI would help existing employees handle a larger workload. This opens up another possibility: an employee's job might be retained, but they are expected to deliver higher productivity. Their duties may change, and competition for promotion will increase.

AI is capable of creating new opportunities, boosting productivity, and fostering business growth. However, it is not guaranteed that the benefits will be distributed evenly across different professions, experience levels, and skill groups. The task for employees is to understand how their role is changing and to acquire skills useful in an automated environment. Companies, meanwhile, have the task of determining how they will share the benefits of increased productivity with employees through higher wages, career advancement, and training opportunities.

The ECB's warning poses a serious question for India's evolving labor market. The future of work is determined only by this...

The International Monetary Fund (IMF) points out that investments in artificial intelligence (AI) infrastructure are crucial to sustaining global economic growth around 3%. Kristalina Georgieva, the IMF's Managing Director, emphasized that Asian countries supplying technological equipment are major beneficiaries of this scenario.

During meetings held by the IMF and the World Bank in Bangkok, Thailand, Georgieva stressed that resources allocated to AI help compensate for the impacts caused by the decrease in energy supply while simultaneously boosting the economies of the region.

In already developed Asian economies, investment in AI has the potential to add between 0.5 and 1 percentage point to economic growth. In emerging Asian countries, the estimated effect is between 0.2 and 0.8 percentage points.

Georgieva emphatically stated that AI is already part of reality, whether accepted or rejected. In July, the IMF had projected global growth of 3% for 2026, with an update to these projections expected on Tuesday. According to her, technological infrastructure helps maintain stable economic activity even in the face of energy supply difficulties.

Among the main producers in the technological supply chain are the United States, China, and India. Asia also has several companies responsible for building this infrastructure, which benefits nations like Thailand, the host of the meetings.

The scope of artificial intelligence transcends the economic sphere. Georgieva described the technology as a 'slow-moving tsunami,' whose implications extend to the labor market, education, and tax collection. Furthermore, the migration of income from labor to capital may force changes in how governments collect taxes.

The IMF calculates that, over time, 40% of jobs may be modified, degraded, or eliminated due to AI. A preliminary study by the institution revealed that 10% of jobs in the United States already required technology-related skills.

While routine and repetitive tasks tend to decrease, sectors such as civil construction and data centers are seeing an increase in vacancies, including positions with lower remuneration.

Ajay Banga, President of the World Bank, mentioned that smaller versions of AI, which do not rely on large language models, have the capacity to increase productivity in agriculture, health, and education in developing nations.

Meanwhile, Tharman Shanmugaratnam, President of Singapore, raised concerns about the drop in demand for newly graduated professionals. He stated that there is an immediate challenge: 'the first step in a career, the first job after graduation, is registering lower demand.'

Shanmugaratnam also warned that without actions to expand access to the benefits of technology, AI risks exacerbating disparities in growth and job creation between developed and developing countries.

To address these challenges, authorities focused on three areas of attention. The IMF and World Bank meetings bring together approximately 18,000 participants, including financial representatives from the fund's 191 members. The debate aims to harmonize the economic gains brought by artificial intelligence with its effects on employment and the distribution of opportunities.