Artificial intelligence will drive another wave of job cuts in 2026 as companies accelerate automation to reduce costs, even though investors are no longer rewarding layoffs, according to a new report by Goldman Sachs.
The warning comes at a time when the global economy is expected to remain broadly stable, underscoring a growing disconnect between economic conditions and job security. While financial markets have begun to view large-scale workforce reductions as a sign of weak growth prospects rather than efficiency, companies are still expected to press ahead with automation-led restructuring.
Goldman Sachs said firms are increasingly deploying AI to automate routine and repeatable tasks, allowing them to contain headcount growth or shrink workforces outright. The report noted that the strategic push towards automation is being driven less by short-term economic stress and more by long-term efforts to reshape cost structures.
Reuters reported that the bank expects AI-related layoffs to persist even as productivity gains from the technology remain uneven and slow to materialise. In many cases, companies are cutting jobs in anticipation of future efficiency gains rather than as a response to immediate improvements in output.
The report marks a shift from earlier market behaviour, when announcements of job cuts were often greeted positively by investors. Goldman Sachs observed that this relationship has weakened, with markets now more likely to interpret layoffs as a signal that companies are struggling to generate sustainable growth.
The Wall Street Journal has previously reported that investors are becoming more cautious about cost-cutting strategies that undermine long-term innovation and talent pipelines. Despite that change in sentiment, Goldman Sachs said competitive pressure and rapid advances in AI tools are leaving many executives little choice but to streamline workforces.
The past year has already seen widespread job losses across industries. Large technology companies led the cuts, but consulting firms, IT services providers and traditional businesses have also reduced headcount as they reorganised operations around AI-enabled systems. Many of these moves were framed as restructuring rather than crisis-driven retrenchment.
Goldman Sachs said roles involving repetitive, rules-based work remain most exposed, particularly in administrative functions, customer support and parts of professional services. At the same time, demand is expected to rise for specialised roles linked to AI development, data governance and system oversight, though these jobs will require significantly different skills.
The report cautioned that the transition is unlikely to be smooth. While AI could eventually support higher productivity and new forms of growth, the benefits may take years to filter through to the wider economy. In the interim, companies appear willing to absorb the social and organisational costs of workforce reductions.
The challenge for employers will be balancing automation with the need to retain institutional knowledge and maintain employee morale. Aggressive cost cutting, they said, risks eroding trust at a time when competition for high-end digital skills remains intense.
For workers, the outlook remains uncertain. Goldman Sachs said continued investment in reskilling and adaptability will be critical as job profiles evolve. However, it acknowledged that not all displaced workers will be able to transition easily into emerging roles.
As companies push deeper into AI adoption, the report suggests that job insecurity may become a structural feature of the labour market rather than a cyclical one. Even in a stable economy, the next phase of automation is set to reshape how many people work — and whether they remain employed at all.