Report: AI Adoption Leads to Retraining, not Replacing, Workers
David Ramel
October 14, 2025
Despite fears that artificial intelligence will lead to major workforce reductions, a new report from the Federal Reserve Bank of New York suggests that’s not happening happening … yet. In “Are Businesses Scaling Back Hiring Due to AI?,” the bank found that while AI adoption has increased across industries, most firms are retraining employees rather than replacing them.
It bucks a lot of industry buzz, with cloud giants like Microsoft, Google, and Amazon undergoing rounds of layoffs in parallel with large AI investments. For example, in 2025 alone Amazon has committed more than $45 billion to AI infrastructure and hardware projects, with CEO Andy Jassy noting in a memo reported by Business Insider, “As we continue to invest in generative AI, we do expect that some roles — especially in corporate functions — will evolve or no longer be needed.”
The NY Fed is one of 12 regional banks in the U.S. Federal Reserve System that oversee monetary policy implementation, financial supervision, and economic research. And some of that research, published last month, sheds some data-based light on the matter.
