AI Squeezes Pay, Not Jobs: New Data

Apollo's chief economist, Torsten Slok, cites a New York Fed survey showing AI is reshaping jobs and suppressing wages in exposed occupations without triggering mass layoffs. Among companies using AI, 34% of service firms and 22% of manufacturers are retraining employees, while only 4% of service firms report AI-related layoffs. Adoption is widespread—61% of service firms and 51% of manufacturers use AI—but the focus is on upskilling for current roles rather than replacement. This suggests AI's immediate impact is on productivity and pay, not headcount reduction. Key signal: Only 4% of service firms using AI reported AI-related layoffs, while 34% are retraining workers. For hiring leaders, this matters because for CHROs and TA leaders, this signals a shift from 'AI will replace jobs' to 'AI will reshape roles and compress wages.' The data challenges the narrative of mass displacement, urging companies to invest in retraining and reskilling programs. It also implies that AI-exposed roles may see salary stagnation, affecting compensation strategies and talent retention. Leaders should prepare for a workforce that is more productive but potentially more anxious about pay, and focus on internal mobility to retain talent. Teksands view: Stop waiting for the AI apocalypse—it's not coming. The real story is wage compression and role evolution. If you're a GCC or IT services firm, this is your cue to double down on upskilling. The companies that treat AI as a productivity lever, not a headcount axe, will win the talent war. Those that don't will bleed talent to competitors offering growth paths.