Goldman Sachs has delivered a stark warning for technology professionals affected by the rise of artificial intelligence (AI): Expect prolonged job searches and potential pay cuts. In a recent note, strategist Pierfrancesco Mei emphasised that workers displaced by technology typically face more significant challenges in re-entering the job market. Notably, they take about an extra month to land a new position and can experience a real earnings dip of over 3% when they do find work – a stark contrast to the minimal income losses faced by employees from more stable job sectors.
The core issue, according to Mei, lies in “occupational downgrading.” Those displaced by technological advancements tend to transition into more routine roles that require fewer analytical and interpersonal skills. This pattern arises because the same technological developments that led to their job losses simultaneously diminished the value of their existing skill sets.
The implications of AI are not theoretical but are being felt now, as evidenced by significant layoffs at companies such as Block, Amazon, Oracle, and Meta, with Block experiencing particularly severe cuts of 40% in its workforce. Amrita Ahuja, CFO of Block, advised her peers to embrace AI tools to enhance work efficiency, highlighting a shift where tasks that once took days may now be completed in a matter of hours.
Oracle, under the leadership of billionaire founder Larry Ellison, also made headlines by laying off nearly 30,000 workers globally. This wave of layoffs is part of a broader trend in the tech industry, where more than 52,000 employees were dismissed in the first three months of 2026, according to analysis from Challenger, Gray, and Christmas, linking many of these job losses to the adoption of AI technologies.
March alone saw the tech sector announce 18,720 job cuts, marking a 40% increase from the same month last year and representing the highest total for the year to date since 2023. Challenger, Gray, and Christmas have warned that further layoffs are likely in 2026 as companies continue to reallocate budgets towards AI investments at the expense of human jobs.
Andy Challenger, the firm’s chief revenue officer, explained that while AI is not capable of replacing every job, it is undeniably leading to job losses, particularly in roles that can be automated, such as coding.
In summary, the landscape for tech workers is shifting dramatically under the influence of AI, with significant consequences for job security and earning potential. Those navigating this transition may need to adapt swiftly as the demand for traditional skills diminishes in favour of new technological capabilities.
