More than 25% of German companies expect job cuts due to AI: Report

By Mucahithan Avcioglu

ISTANBUL (AA) - German market research institute ifo said on Thursday that 27.1% of companies in Germany expect artificial intelligence (AI) to cause job cuts in the next five years.

"Only 5.2% of companies anticipate additional jobs, while two thirds expect no change," ifo said in a statement.

Klaus Wohlrabe, head of surveys at ifo, said if there are layoffs, the impacted firms anticipate an average drop of about 8%.

More than a third of businesses in the manufacturing sector (37.3%) also anticipate layoffs.

On the other hand, more than 80% of businesses in the construction sector think AI will not affect payroll.

Meanwhile, there is a good employment stimulus: Individual businesses are already expecting a rise in technology-related services like information processing or IT, with growth of more than 10% anticipated in certain situations.

“AI is not only becoming a rationalization tool, but also a springboard for new job profiles,” said Wohlrabe.

“The employment effects of artificial intelligence are still moderate but in the longer term, AI could change the German labor market," he added.

The challenge lies in translating the resulting productivity gains into widespread prosperity, without creating major upheaval in certain occupational groups, according to the statement.