For most of the past two years, worries about artificial intelligence and jobs centered on software engineers, coders and young tech workers. That picture is getting a lot wider. Goldman Sachs economist Jan Hatzius now says AI’s impact on employment is starting to show up in industries far from Silicon Valley.
The timing is awkward for investors. Tech stocks slid on October 22 as fears grew that the AI investment boom may have peaked. Now the same technology that powered the rally is raising harder questions about paychecks, spending and growth heading into 2027.
Goldman Sachs says AI is hitting jobs well beyond tech
The core finding is fairly simple. Across U.S. non-manufacturing industries, companies that lean more on AI in their regular business functions are seeing weaker employment growth and higher unemployment, and both links are statistically significant, according to Seeking Alpha. Goldman measured both outcomes against their 2015 to 2019 averages, using the latest three-month readings.
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A separate note from Goldman economist Joseph Briggs, dated October 22, points in the same direction. Employment in the industries most exposed to AI has slipped about 10,000 jobs below its long-term trend over the past three months, although stronger hiring in AI-related construction has largely offset that gap.
The pain is not landing evenly, either. In an August 19 report examining employment growth across more than 800 occupations, Goldman found that AI-related hiring headwinds were strongest for entry-level workers.
Corporate America is starting to act on it. American Express said on October 23 that it would eliminate about 5% of its global workforce, with CEO Stephen Squeri saying the company is using AI to become more agile and efficient. A credit card company, not a chipmaker, is exactly the kind of spread Hatzius means.
Solid labour markets hide a slow, steady drag
Hatzius was careful not to oversell the alarm. Taken as a whole, he said, labor markets in developed economies are still holding up, and Goldman has not backed away from its view that AI spending will eventually pay for itself through improved productivity and higher profits across the economy.
The uncomfortable part is how that happens. Some of the payoff comes from companies needing fewer workers, and the bank admits that process hurts the economy before it helps.
Briggs has been tracking that drag for months. In July, he said AI tools were already pulling between 10,000 and 15,000 jobs out of monthly payroll growth, mostly in tech, management consulting and graphic design. He also estimated that AI could displace roughly 9% of American workers over the next decade.
The monthly picture has shifted since then. Goldman’s research showed AI was replacing more jobs each month than it created through new, adjacent roles, but the net gap narrowed by June as data-center construction hiring picked up. In other words, the AI building boom has been quietly covering for AI’s job losses elsewhere.
That cushion may not last. Only 23% of U.S. establishments currently use AI in their regular workflows, suggesting most of the disruption is still ahead and that an economic downturn could accelerate automation and layoffs, according to Investing.com. Goldman’s baseline still calls for a gradual rise in AI-related disruption rather than a sudden shock.
Goldman found AI-related hiring headwinds were strongest for entry-level workers.
The AI spending boost is close to its peak
The second half of the note may matter even more for markets. Goldman said the growth impulse from the AI boom was already set to peak in late 2026 or early 2027, even before recent doubts about the investment boom intensified. AI investment is still rising fast, but its increase as a share of GDP should slow over the next twelve months, while the fading lift from last year’s bigger U.S. depreciation allowances also weighs on capital spending.
Goldman’s own strategists see a similar pattern. They expect the five largest U.S. hyperscalers to continue raising AI spending, but capex growth is projected to decline sharply in 2027 and again in 2028. The bank also estimates these companies need roughly $300 billion in annual AI revenue just to break even.
Investors have already started to price in that slowdown. Tech stocks fell on October 22 after Meta increased its capital spending guidance and Tesla cut its full-year capex guidance by $5 billion. Capital.com analyst Kyle Rodda said the worry had flipped from hyperscalers spending too much to investment growth slowing down.
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Financing costs add another layer. The 10-year Treasury yield climbed to its highest level since 2002 in early October, and Fed Chair Kevin Warsh has acknowledged that hyperscalers raising money in the bond market are adding to competition for capital, according to TheStreet. The largest hyperscalers have shrugged off higher funding costs so far, but smaller AI players are far more exposed.
Consumers may lose a quiet tailwind
Households have been riding the AI boom, too. Goldman estimates that gains in AI-related stocks have quietly lifted consumer spending, and Hatzius expects that support to fade over the next year, gradually if the bank’s fairly upbeat stock outlook plays out and more sharply if AI stocks keep falling.
Consumers are not in great shape to absorb that hit. U.S. consumer sentiment slipped to near a record low in October as rising prices tied to the Middle East conflict soured views of the economy.
So what should workers and investors actually watch? Not the jobless rate, which tends to pick up the damage late. Adoption rates and entry-level hiring are the better early warning signs. Right now, those are the places where the strain is showing, from American Express trimming staff ahead of its AI push to younger workers struggling to get hired.
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