AI’s impact on employment “is a slow-moving tsunami, but a tsunami nonetheless”, the head of the International Monetary Fund (IMF) has warned, as the technology threatens to reshape six in ten jobs across advanced economies.
Kristalina Georgieva, managing director of the IMF, said AI could affect 40 per cent of jobs worldwide, rising to 60 per cent in wealthier countries, with younger workers particularly vulnerable as employers automate entry-level tasks.
Speaking at the IMF’s annual meetings in Bangkok, Georgieva warned that the technology could eliminate some jobs, reduce the value of others and change the skills required across entire industries.
She said the impact was already becoming visible, with routine and repetitive jobs shrinking while demand for workers with AI skills increased.
An IMF study of the US labour market found that 10 per cent of jobs now require higher-level AI skills, which typically command better pay.
However, Georgieva warned that employment growth was increasingly concentrated in lower-paid sectors, including construction linked to data centre development and services.
“The net impact of the area we studied is actually positive. But that’s not a story to celebrate because it is positive on the side of lower-paying jobs”, she said.
The IMF chief singled out younger workers as particularly exposed, warning that the disappearance of routine jobs could remove traditional routes into professional careers.
“Normally, they would get into these routine, repetitive jobs and then grow up the ranks”, she said.
London workers face greatest AI exposure
The warning carries particular significance for Britain, where London has been identified as one of the world’s most AI-exposed labour markets.
An OECD report published in July found that nearly four in five jobs in the capital were highly exposed to generative AI, reflecting London’s concentration of professional and administrative roles.
The UK government is already preparing contingency plans for potentially severe disruption to employment.
AI minister Kanishka Narayan warned last month that Britain must prepare for the possibility of an “unprecedented impact on the jobs market”, although he stressed there was not yet evidence of an overall fall in employment caused by AI.
The Institute for Public Policy Research has estimated that up to eight million UK jobs could be affected in a worst-case scenario.
Georgieva also raised concerns about the consequences for government finances if AI shifts income away from workers and towards businesses and investors.
“Traditionally, governments would generate revenues by taxing mostly people”, she said. “Well, if AI changes the structure of the labour market and then there is less labour, more capital, what do we tax?”
The warning echoes concerns raised by Britain’s Office for Budget Responsibility (OBR), which has suggested that a sharp decline in labour’s share of national income could significantly reduce future tax receipts.
Georgieva called on governments to rethink education, invest in lifelong learning and closely monitor changes in employment before disruption accelerates.
She cautioned against assuming AI was already reducing overall demand for workers, arguing that the immediate effect was a shift in the types of jobs employers needed.
“First the myth that AI is shrinking demand for people. What it is doing is it is shifting demand for people”, she said.
But she warned that the longer-term consequences remained deeply uncertain: “We cannot today imagine what exactly the world of work will be five years from now”.