Artificial intelligence is not taking over jobs just yet, according to a recent report from MIT’s State of AI in Business 2025. Instead, AI is mainly replacing outsourced, offshore workers.
The report found that organizations are finding benefits from “replacing business process outsourcing” and external agencies, rather than cutting internal staff. This means that companies are canceling contracts with outsourced labor instead of laying off employees.
While 3% of jobs could be replaced by AI in the short term, nearly 27% could be replaced in the longer term. However, industries that are advanced adopters of AI see the nearest-term labor impact.
According to the report, companies are currently backfilling workers with AI instead of replacing them. This strategy has led to financial gains, with some companies saving millions of dollars by spending on AI tools.
The study also found that 50% of AI budgets flow to sales and marketing, indicating a shift towards front-office tools. However, it can be harder to measure the success of these tools.
IBM CEO Arvind Krishna and Anthropic CEO Dario Amodei have sounded different notes on the impact of AI on jobs. Krishna argues that the employment picture is more promising than initially thought, while Amodei warned of a significant risk to entry-level white-collar jobs.
Source: https://www.axios.com/2025/08/18/ai-jobs-layoffs