In Europe, companies that are reducing their workforce have outperformed those that are actively hiring. This market behavior indicates that investors are currently prioritizing AI-driven efficiency gains and cost-cutting over strategies focused on expansion and growth.
The UK's high 8% net job loss in AI-adopting firms, double the global average, was primarily caused by a low level of new hires and a high rate of not backfilling open positions. This suggests broader labor market weakness amplified the impact of AI-driven role elimination.
A Morgan Stanley survey of AI-adopting firms reveals a significant regional divergence. While globally these companies saw a 4% net job reduction over 12 months, US firms experienced a 2% net increase, driven by strong AI-related hiring that more than offset job cuts and attrition.