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AI Could Drive Mass Job Displacement and Transform Economies, Economists and 16 Nobel Laureates Warn

AI Could Drive Mass Job Displacement and Transform Economies, Economists and 16 Nobel Laureates Warn

Oracle has reportedly laid off about 21,000 employees in the last year, as it increases its spending on AI infrastructure.

Written by Dhruv Raghav, Edited by David Delima | Updated: 14 July 2026 13:04 IST

AI Could Drive Mass Job Displacement and Transform Economies, Economists and 16 Nobel Laureates Warn

Photo Credit: Unsplash/ Wes Hicks

AI could lead to "major gains in living standards"

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Highlights

Anthropic’s Jack Clark is among the key signatories
Signatories also highlight the opportunities AI offers
Economists have signed the letter titled “We Must Act Now”

Tech firms globally are either in the process of integrating AI technologies and automation into their workflows. This, added with the use of AI chatbots by individuals for various daily tasks, has led to an unprecedented rise in AI adoption. The proponents of AI argue that the agents improve efficiency. However, the accelerated adoption of AI by firms comes as companies have laid off several workers and cut white-collar jobs, including managerial positions. Warning about the potential dangers of AI, various economists, Nobel laureates, and industry leaders have signed a letter, claiming that AI could lead to large-scale job displacements and transform economies.

Google, OpenAI and Anthropic Executives Among Co-Signatories

More than 200 economists, Nobel laureates, and industry leaders have co-signed the letter titled “We Must Act Now” on AI's transformation of the economy. The letter states that AI could become “radically” more powerful over the next 10 years. This phenomenon is said to transform world economies in an unprecedented manner, touted to be larger than the Industrial Revolution. However, this change is predicted to unfold over a significantly shorter period of time.

This rapid transformation poses significant risks, the statement notes. Among other risks, AI's unprecedented transformation of economies is said to cause “large-scale job displacements”. Apart from its threats, the letter notes that this phenomenon also presents a few opportunities, including “major gains in living standards”.

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In the letter, the signatories agree that economists, policymakers, and technology leaders “must act now” to understand the economics of transformative AI. They must also set up guardrails against the threats and build incentives and institutions required to “steer AI” in the direction that “complements humans” and provides benefits to society as a whole.

As previously mentioned, the list of signatories includes some prominent Nobel laureates, like Daron Acemoglu, Simon Johnson, and Christopher A. Pissarides. Apart from economists, the list also names a few industry leaders, like Anthropic's Co-founder Jack Clark, OpenAI's Ronnie Chatterji and Dean Ball, former CEO of Google Eric Schmidt, and Google DeepMind's Michiel Bakker.

This comes as various companies have already begun announcing massive layoffs citing cost reductions, macroeconomic conditions, and organisational restructuring. In March, Oracle announced it was laying off 491 employees, reportedly taking the total number of terminated employees to 21,000 in the last year. This came as the tech firm has increased its spending on building AI infrastructure. Similarly, Microsoft is said to be planning to reduce its workforce by about 2.5 percent. Coinbase and Cognizant have also laid off several employees due to accelerated AI adoption.

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Further reading: AI Jobs Cuts, AI, Layoffs, Google, OpenAI, Anthropic

Dhruv Raghav

Email Dhruv Raghav

Dhruv Raghav is currently working as a Senior Sub Editor at Gadgets360. He has previously covered the North American financial markets as a Headline News Correspondent for a major news agency. After taking a sabbatical to prepare for the Civil Services examination, he returned to journalism to cover tech policy, with a special focus on AI laws and online gaming regulation. Now, he is back in Gadgets360 to write features and edit stories. To unwind, he likes to spend time with his PS5, listening ...More