When Oracle cut scores of jobs last month, Melody Wilding, an executive coach and author, knew she was going to hear about it from her clients. For months now, the corporate professionals Wilding advises have been airing fears about losing their jobs, and their worries seem to spike “when big companies make layoff announcements,” she says. In the era of ‘forever’ layoffs and looming dread caused by AI’s advances in automating work, her clients are plagued by “the sensation that you never can get too settled. [N]ot only could your entire reporting structure change tomorrow, the department or the product you were working with may be gone.”
Many of the executives that New York-based Wilding coaches are in the tech field, but job insecurity has become a universal truth: The fear her clients are voicing is consistent among workers regardless of geography, job level, work type, and sector.
A recent report from the HR software company ADP based on a survey of 39,000 workers in 36 countries last year found that fewer than one in four respondents felt confident that their job is safe from elimination. In no country did the share of job-secure workers breach 38%, and even though job security rose slightly with seniority, still only 35% of C-suite executives felt their job was safe. Knowledge workers who use expertise “to create something new” (30%) felt safer in their jobs than skilled workers—those who use expertise to “solve similar problems each day— (18%) or workers in repetitive jobs (16%). Knowledge workers in finance and insurance had the highest confidence at 39%.
As anyone who has had the experience can attest, this kind of anxiety is hard to live with. In fact, worrying about losing a job can take a similar toll on wellbeing as the worst-case scenario of actually losing a job. Indeed, researchers have described the two experiences as “surprisingly identical twins.”
That sense of unease is easily framed as an individual problem, one you discuss with a career coach or even therapist. But its depressive effect can harm mental health, physical health, and personal relationships. And workers’ job insecurity is also an enormous drag on the companies they work for. It sours workplace relationships, stifles creativity, eats away at productivity, and can even make workers more prone to jobsite accidents.
Hans De Witte, an emeritus professor of work psychology at KU Leuven, says there’s a “dangerous” belief among business leaders: that fearful employees “might really want to work harder in order to keep their jobs.” Fortune reports that one reason CEOs are tying layoffs to AI is that they expect it to motivate remaining employees to adopt the technology. De Witte says: “Let me be very explicit that there is massive empirical evidence showing the absolute opposite. Insecurity leads to lower performance.”
Indeed, researchers have studied job insecurity for decades and reached the overwhelming consensus that the sentiment is a net negative for organizations. And now AI is putting a new twist on the old fear; workers are not just worried about losing their current job, they’re worried about their entire arsenal of skills—or still worse, their entire occupation—becoming obsolete.
And unlike past eras of elevated job insecurity, like the COVID-19 pandemic, the AI revolution has no end in sight. If AI didn’t take your job this year, it might still displace you next year, meaning the detrimental effects of AI job insecurity could become a mainstay of the modern workplace that CEOs and managers have to contend with indefinitely.
Workers are panicking. Are they overreacting?
There’s no easy fix for companies facing this problem in their workforces. Job insecurity is subjective; it’s in the eye of the beholder. And it’s fair to say that workers today are probably perceiving the immediate risk of layoffs as worse than it actually is. Global unemployment remains at its lowest level in decades. A report from the Yale Budget Lab suggests that the notion of AI roiling the job market “remains largely speculative.”
Still, the labor market is off-kilter. A low-hire, low-fire, “job-hugging” environment has sapped workers’ sense of mobility, adding to their uneasiness, says Ravin Jesuthasan, global leader of transformation services at Mercer, a consulting firm. And reports that AI is shrinking entry-level or middle-management opportunities are upending the traditional career trajectories that workers have come to trust.
CEOs are arguably making things worse. Many leaders are dabbling in “AI washing”—blaming layoffs on AI even if it was not the cause. That spin is intended to win over investors, but the workforce at large is listening too. Employee concern about job loss due to AI rose to 40% this year from 28% in 2024, according to a global Mercer survey of 12,000 executive, HR leaders, investors, and employees.
It’s hard to unhear warnings from CEOs like Block’s Jack Dorsey, who blamed laying off 40% of his workers on AI and predicted that other companies “will reach the same conclusion and make similar structural changes.”
And workers using AI day-to-day are grasping how much of their jobs the technology can do.“They’re seeing the tools evolve before their very eyes,” Jesuthasan says.
The creativity-killer hiding in plain sight
There’s a disconnect between the framing of the AI revolution as a time for ingenuity, and the ways that job insecurity can make it scary to go out on a limb.
Company leaders are encouraging employees to experiment with AI, build their own agents, unearth efficiencies, and share their findings with coworkers. Coursera, an online learning platform, runs monthly “AI spark sessions” where employees share how AI is helping them do their jobs. Amid dire warnings about AI coming for jobs from some chief executives, Coursera CEO Greg Hart has emphasized a carrot-not-stick approach to AI adoption, and talks about the process as “an opportunity to think about the really transformative effect that AI can have for your company.”
But the job insecurity that’s wracking the wider workplace can effectively kill that sense of discovery. “When we face threats—and job loss is a major threat—we tend to focus very narrowly on things that are known,” says Mindy Shoss, a psychology professor at the University of Central Florida who focuses on the future of work. “It really constrains thinking, and we try to latch on to solutions or any information we can find… That’s sort of the opposite of what we need for creativity.”
Shoss’s research backs up this common-sense view. She has found that people who fear for their job “want to play it safe.” She also points to a well-known theory in psychology called ‘broaden and build’ or the idea “that when we have positive emotions, we can broaden our mental horizons and come up with different ideas and solutions. Vigilance and alarm and fear make it hard to think broadly; it’s hard to think of new things, and it’s hard to take risks.”
FOBO: the next level of dread
Getting more done with less is one of AI’s fundamental promises, and many CEOs seem to be buying it. Google CEO Sundar Pichai, for instance, has positioned AI adoption as a moment to “accomplish more” and focus on “employee productivity.” Meta CEO Mark Zuckerberg is flattening his company’s organizational structure after saying “a single, very talented person” can now complete projects that used to require big teams.
But job insecurity can undermine human workers’ ability to get stuff done.
Fear of losing a job breaks the psychological contract and disrupts the rewards system between employee and boss, says De Witte. If employees no longer expect to keep their job or advance, even if they perform well, they tend to withdraw, he says: “If I suddenly feel that my job became insecure for a variety of reasons…you’re taking away something you promised to me.”
Fearing for one’s job is also a major distraction. “People reduce their involvement in the company because they have to deal with something inside themselves,” De Witte says. It can also cause workers to focus on what De Witte calls “impression management” and what Shoss calls “performative behaviors”: over-talking in meetings, over-messaging on Slack, overcommunicating KPI progress, or even coming to the office while sick. “People are working really hard to look busy,” Shoss says.
AI advances are breeding another kind of fear that goes beyond the loss of a single job: the fear of becoming obsolete—or “FOBO.” It’s not just a matter of worrying about losing your job as a data scientist; it’s worrying about data science disappearing entirely as a profession.
Academics are still studying the fallout of FOBO, but existing research shows that in addition to burnout and disengagement, it may result in resistance to technological change, causing “costly implementation failures.” And indeed recent reports suggest that some employees are sabotaging their companies’ AI rollouts by misusing AI tools, generating poor work to make AI appear ineffective, or outright refusing to employ the technology.
What leaders (and workers) can actually do
CEOs can fan the flames of AI-driven job insecurity among workers, and they also have the power to calm fears—even if they, like workers, don’t exactly know how this all ends.
It comes down to communication, says Shoss. “People just want to know, what’s the process by which you’re going to think about this or explore it? Are you gonna have input from people? If there’s going to be a change, how are you going to lay this out?” she says. “That can create a sense of certainty, even though everything’s uncertain.”
Workers can also take things into their own hands. “Don’t just let worry eat you alive,” says Wilding. “Use the worry as an impetus for action: ‘What is this worry trying to tell me?’ It’s trying to tell me that maybe I should not just be stressing out about how I haven’t touched LinkedIn in five years. Maybe it’s telling me I should take 15 minutes to try to clean up my profile a little bit.”
