AI-displaced workers stay jobless longer — and older ones take the hit

Workers displaced from AI-exposed jobs since 2025 took about a month longer to find new work than other displaced workers, and were roughly 10 percentage points more likely to still be unemployed a year later. That's the core finding of a Goldman Sachs note published Thursday by economist Pierfrancesco Mei, who says the damage is "comparable in magnitude" to four decades of earlier tech-driven displacement — damage Goldman calls "long-lasting."

Employers named AI as the reason for 120,136 announced job cuts through September, about 21% of all cuts and the top cited reason, according to Challenger, Gray & Christmas' September report.

Who is hurting most?

The age split is stark. AI-displaced workers aged 35 and older took about five weeks longer than other displaced workers to return to full-time work. For those under 35, the gap was about three weeks.

Government data shows the same pattern economy-wide. The Bureau of Labor Statistics' Displaced Worker Supplement, released in August, counted 7.4 million workers displaced between 2023 and 2025, up from 6.3 million in the prior 2021-2023 survey. Among long-tenured workers, 72.9% of those aged 25 to 54 were employed again by January 2026 — versus 57.3% of those 55 to 64 and just 38.6% of those 65 and older.

Takeaway: the longer your career, the longer the road back after an AI-driven layoff.

Is the pay hit already visible?

Yes. Of long-tenured workers who lost full-time jobs from 2023 through 2025 and landed full-time work again, about 49% earned as much or more than before — down from about 62% in the prior survey, per BLS.

Goldman's earlier research, using individual-level data back to 1979, found workers who lost jobs to technology saw slower real earnings growth and persistently higher odds of repeat unemployment for years afterward. The losses weren't evenly spread: younger, college-educated and urban workers saw cumulative real earnings losses about half as large as others over the decade after job loss, as did workers with shorter tenure, whose skills were "less occupation-specific and therefore more transferable," Mei wrote.

Takeaway: transferable skills, not tenure, protected earnings in past tech waves — and that looks to be repeating.

What about young workers?

The picture is mixed. Younger AI-displaced workers returned to work faster, held fewer temporary jobs and were less likely to need a second job. Mei said they "may be able to adapt more flexibly to AI disruption" — "an encouraging sign given concerns that AI-driven job losses could disproportionately affect recent graduates."

But Stanford's Digital Economy Lab, using ADP payroll data, found in August that employment for workers aged 22 to 25 in the most AI-exposed occupations runs about 19% below where it would be if it had kept pace with peers in less-exposed jobs. "Experienced workers show no comparable gap," wrote Erik Brynjolfsson, Bharat Chandar and Ruyu Chen, noting the adjustment "appears to operate primarily through reduced hiring of young workers rather than increased separations."

How solid is the data?

Goldman analyzed more than 15,000 displaced workers from the Current Population Survey's Displaced Worker Supplement, covering job losses from 2016 through 2025. No survey asks directly whether AI cost someone their job, so Goldman scored occupations on AI exposure, industry adoption and position elimination, treating the top 30% as likely AI-displaced. It found no significant gap between groups for losses before 2023, when AI adoption began rising.

Skeptics remain. The Yale Budget Lab has found AI exposure measures "show no sign of being related to changes in employment or unemployment," and Stanford's team sees no "widespread, economy-wide job displacement associated with AI."

One warning sign echoes history: rehired AI-displaced workers, "especially older ones," are moving into roles with similar or even higher AI exposure. Goldman cautions it's "still too early to assess the impact along all of these dimensions" — meaning the next supplement, in two years, will show whether the scar sets the way past ones did.