Businesses Are Using AI to Transform Work, Not Cut Jobs
The New York Fed's Businesses Are Using AI to Transform Work, Not Cut Jobs (September 2026; regional business surveys, executive survey) found that 61% of service firms now use AI, but only 4% laid off workers because of it in the past six months, while about 15% hired fewer and about 13% hired more.
Key findings
- 0161% of service firms and 51% of manufacturers used AI in 2026, up from 40% and 26% in 2025 and 25% and 16% in 2024.Firms using AI only as an information search tool were not counted as users.
- 02Only 4% of service firms laid off workers in response to AI in the past six months, up from 1% last year; no manufacturers did.About 15% of service firms hired fewer workers than they otherwise would have, similar to 12% last year.
- 03About 13% of service firms hired more workers because of AI, roughly offsetting those that hired fewer.No manufacturers increased hiring due to AI this year.
- 04Among AI adopters, the median share of workers using AI was 17% in service firms and 7% in manufacturers.Three-quarters of service firms and more than 90% of manufacturers describe their AI investment as minimal to modest.
- 05Just over a third of AI-using service firms and more than 20% of manufacturers retrained workers in response to AI.Training focused mostly on doing current jobs better, including tool use, automating routine tasks and verifying AI output.
By the numbers
61%of service firms use AI (2026)
17%median share of workers using AI at adopting service firms
4%of service firms laid off workers due to AI
What it means for you Draft
For executives at $10–100M companies
This regional sample is mostly ordinary businesses, not tech giants, and it shows AI spreading fast while headcount effects stay small and cut both ways. For a $10–100M company, the peer norm appears to be modest spending, a minority of staff using AI, and retraining rather than layoffs. The gap between 'we use AI' and 'most of our people use AI' is where the work is.
For practitioners
Median usage of 17% of workers at adopting service firms suggests broad rollout is the bottleneck, not tool access. Training that covers verifying outputs and data handling is what peers report doing.
Limitations
Medium trust.Fed economists with a consistent three-year question set and no commercial interest, but regional sample with undisclosed n.
Covers one region (New York and Northern New Jersey), and the post does not report sample sizes or firm-size breakdowns. Responses are self-reported by firms and some figures are given only as approximations.
Federal Reserve Bank of New York. "Businesses Are Using AI to Transform Work, Not Cut Jobs." September 1, 2026. https://libertystreeteconomics.newyorkfed.org/2026/09/businesses-are-using-ai-to-transform-work-not-cut-jobs/
Related reports
Anthropic Economic Index report: CadencesOver one-third of respondents expect AI to handle most or nearly all of their work tasks within 12 months.
AI at Work 2026: Why Strategy Matters More Than Tools42% of frontline regular AI users save about eight hours a week, but 66% get limited or no guidance on using that time.
Firm Data on AI (NBER Working Paper 34836)Across four countries, most firms use AI, but nine in ten executives report no effect yet on jobs or productivity at their own firm.