About 14% of service companies in the New York-Northern New Jersey area have scaled back hiring or plan to do so in the next six months as a result of artificial intelligence but few have laid off employees so far as a result of the burgeoning technology, a new survey shows.
There’s little doubt more businesses are using AI.
Forty percent of the region’s service companies used the technology this year, up from 25% at the same time last year, according to the August survey of about 300 executives by the Federal Reserve Bank of New York. Another 44% said they expect to use AI over the next six months. The share of manufacturers using AI has jumped from 16% to 26%, with another third expecting to adopt the technology in coming months.
Among service firms, 12% of those using AI – or 5% of all services companies – said they had hired fewer workers as a result and 23% of AI-using businesses – or 9% of all service firms – said they expected to bring on fewer workers the next six months. No manufacturers said they’ve pared back hiring in recent months but 10% said they planned to do so in the months ahead.
Which jobs could be lost due to AI?
The pullback in hiring was concentrated in jobs requiring a college degree, the report said. The companies surveyed said they’re using AI for marketing and advertising, business analysis, data management, customer service, accounting and computer programming, among other applications.
“Such curbs on hiring may be contributing in some small part to reports of recent college grads struggling to find jobs,” the report said.
At the same time, 11% of service firms using AI and 7% of manufacturers said they’ve hired more workers due to AI and 10% to 15% of both types of companies expect to do so in the next six months. Although the survey didn’t determine the number of employees added versus the drop in hiring, New York Fed economists said the two trends are roughly offsetting each other.
Is AI causing people to lose their jobs?
Just 1% of service companies using AI said the technology has prompted them to lay off workers over the past six months, down from 10% a year ago. Another 13% said they anticipate layoffs the next six months. However, the report noted that a similar share planned to cut workers in the 2024 survey “when in fact very few did so this year,” the report said.
“Layoffs have been almost non-existent,” said Richard Dietz, an economic policy advisor at the New York Fed.
And across the economy, “The impact is likely to be fairly limited,” he said.
Many businesses are retraining existing workers affected by AI, the report said. About a third of service firms and 14% of manufacturing companies said they’ve retrained workers in response to the technology and nearly half of both types of companies expect to do so in the next six months.
“Our surveys suggest that for those who have a job, they are more likely to be retrained than replaced by AI,” the report concluded. “Moreover, AI has created job opportunities for those skilled in its use, with some firms hiring new employees to work with this emerging technology.
“However, for some job seekers, AI has likely made it a bit harder to find the job as some firms have reduced hiring due to its use.”
Other studies have found a more dramatic impact on employment from AI, especially among recent college grads and entry-level workers in the tech field. Since 2022, information technology employment among recent grads aged 22 to 27 has declined by 8% compared with a 0.8% rise for college grads older than 27, according to a recent report by Oxford Economics.
And from April 2022 to March 2025, the unemployment rate for recent college grads jumped from 3.9% to 5.8% while the jobless rate for all workers rose from 3.7% to 4%, according to a separate New York Fed survey.
Economists and staffing firms have said AI is handling many basic software development tasks, leading companies to hire far fewer entry-level programmers.
Source – https://www.usatoday.com/story/money/2025/09/04/ai-less-hiring-few-layoffs/85966555007/