Job displacement anxiety: The psychological perils of AI on employees

Prisha Khanna

(an undergraduate psychology student at FLAME University, Pune)

Artificial intelligence (AI), considered the best invention of humankind, is slowly making our worst nightmares come true. AI is already doing most jobs better than we ever could, and the human cost of it is jarring.

The prevalence of AI and its ability to replace several automated tasks in the workplace have now become a direct threat to the social position of employees (Mirbabaie et al., 2021). Individuals who fear losing their competencies and independence to the automotive wave are more likely to perceive AI as a greater threat to their identity. Those who have an increased sense of work responsibility and seem to have a heightened sense of importance for their role also tend to experience an increased identity threat (Mirbabaie et al., 2021). Lack of awareness and preparedness to work with AI is a prominent reason for this.

These are some leading factors that cause employees to experience uncertainty and anxiety about being replaced at their jobs. Unfortunately, their anxieties have exacerbated in recent times.

Goldman Sachs has estimated that about 300 million jobs could be lost due to this rapidly evolving technology (Kelly, 2023). There has been an influx of investments in global AI projects in recent times. Since 2021, $94 billion worth of investments have been made in AI (Kelly, 2023). Such a growth trajectory can only mean higher job insecurity in the coming years.

Layoffs and job

displacement anxiety

2024 has already seen 32,000 employees become victims of mass layoffs at top companies like Google, Amazon, and Meta (Bhati, 2024). The trend of mass job cuts seems to be nowhere near stopping, and its psychological implications are slowly coming to light. The sheer lack of empathy displayed by organisations often leaves employees feeling expendable (Kelly, 2023). It creates an atmosphere of fear, uncertainty, and a lack of trust in the organization. If the largest companies in the world can throw thousands of brilliant minded employees out of jobs, then the rest of us need to let go of our perceived bubble of employment security (Kelly, 2023).

Frequent layoff cycles have a proven long-term impact on the mental and emotional wellbeing of workers. It results in increased stress levels, reduced self-esteem, and anxiety owing to the uncertainty that surrounds one’s employment. Added to this is the fear of impending financial unpredictability (Kelly, 2023).

As employees across jobs are watching the strength of generative AI grow at an unprecedented rate, there is a constant fear that machines may one day replace human workers. This fear of job loss is labelled job displacement anxiety. Studies have shown that workers across sectors report feelings of anxiety regarding their future employment and the relevance of their skillset to the fast-moving industry requirements (Cox, 2023). PwC’s annual global workforce survey from 2022 revealed that at least one-third of the respondents reported concerns regarding the chances of AI replacing them at their workplace (Cox, 2023).

The implications of job displacement anxiety go way deeper than apprehensions about the future. The psychological impact is significant and has been found to take a toll on the motivation and well-being of the employees. It is crucial to analyse the psychological impact of the situation so that employees across the globe are better equipped to navigate the uncertain AI waters.

Psychological Implications of AI

The impact of AI in the form of mass layoffs, combined with the constant worry over the future of their careers, is pushing employees under immense psychological burden.

The loss of employment is bound to bring with it a gush of negative emotions. The shock and disparity of having been laid off are most often followed by reduced self-esteem and various symptoms of anxiety and even depression (Laker, 2023). These symptoms are elevated when there is a growing financial and social insecurity that grips displaced employees. The resultant panic can negatively impact day-to-day functioning and may, in fact, even hamper one’s ability to secure another job (Laker, 2023). The reduced self-esteem may eventually lead to reduced self-worth and distorted self-perception, which may reduce one’s overall productivity and various other cognitive abilities like concentration, decision-making, etc. (Laker, 2023).

Those who are not subjected to such a displacement are still impacted by the lack of job security. The fear that they may be the next one to be laid off often leaves employees feeling stressed and anxious about the fate of their job. The additional workload on them owing to organisational downsizing exercises increases symptoms of burnout and deteriorates the mental and physical health of the employees (Laker, 2023).

A study conducted using a French survey revealed that mass layoffs result in an increased consumption of prescribed psychotropic drugs among employees who were not displaced (Clainche & Lengagne, 2019). The significant increase has been attributed to possible reasons stemming from job insecurity and what it means for employees, their financial security, their families, and their health (Clainche & Lengagne, 2019).

People on either side of the job displacement crisis have something to fear. Thus, it becomes imperative for individuals to constantly stay a step ahead in their professional journeys. The future of work is to work with AI, not against it. The existing workforce needs to be prepared for that.

The Way Forward

Keeping up with AI is essential for not just the newer generation entering the workforce but also for the existing employees. The Future of Jobs Report 2023 suggests that at least 44% of existing workers’ skills will be disrupted in the next five years (World Economic Forum, 2023). This means that continuously learning and upskilling are now more important than ever. It is important to critically evaluate the job market and recognise skills that AI can’t replace, such as empathy, leadership, and social influence, among others, which can be honed and used to one’s advantage (World Economic Forum, 2023). While AI may be eating up several jobs, it is already creating many more jobs that never previously existed. It is vital to recognise and grab the right opportunity. This can only be achieved through upskilling (World Economic Forum, 2023). The rapid advancement of AI and machine learning has irreversibly re-moulded our workplaces. The key to navigating the challenges that come with this automation is embracing the growth mindset of constantly learning. Adaptability will prove to be a crucial factor in staying ahead of the curve and safeguarding future careers for the existing workforce.

The need of the hour is for individuals to strongly consider investing in personal and professional development and for organisations to facilitate this process for their employees. Such proactive initiatives can help carve the path for a more resilient workforce that is equipped to work in the age of automation.

References

Bhati, D. (2024, February 6). Google, Microsoft, Meta, and other tech companies will continue job cuts in 2024 and have laid off more than 32,000 employees so far. India Today. Retrieved February 23, 2024, from https://www.indiatoday.in/technology/news/story/google-microsoft-meta-and-other-tech-companies-continue-job-cuts-in-2024-laid-off-more-32000-employees-so-far-2498265-2024-02-06

Clainche, C. L., & Lengagne, P. (2019). The Effects of Mass Layoffs on Mental Health. Institut de recherche et documentation en économie de la santé. https://www.irdes.fr/english/working-papers/078-the-effects-of-mass-layoffs-on-mental-health.pdf

Cox, J. (2023, April 18). The anxiety of being replaced by AI. BBC. Retrieved March 28, 2024, from https://www.bbc.com/worklife/article/20230418-ai-anxiety-artificial-intelligence-replace-jobs

Kelly, J. (2023, February 7). Layoffs are Harming the Mental Health of Workers, Making them Feel Vulnerable and Disposable. Forbes. Retrieved February 23, 2024, from https://www.forbes.com/sites/jackkelly/2023/02/07/layoffs-are-harming-the-mental-health-of-workers-making-them-feel-vulnerable-and-disposable/?sh=19ac2794667e

Kelly, J. (2023, March 31). Goldman Sachs Predicts 300 Million Jobs will Be Lost or Degraded By Artificial Intelligence. Forbes. Retrieved February 22, 2024, from https://www.forbes.com/sites/jackkelly/2023/03/31/goldman-sachs-predicts-300-million-jobs-will-be-lost-or-degraded-by-artificial-intelligence/?sh=357987c1782b

Laker, B. (2023). Job Loss: Understanding the Emotional Impact and Coping Strategies in a Recession. Wikipedia. Retrieved March 31, 2024, from https://www.forbes.com/sites/benjaminlaker/2023/08/03/job-loss-understanding-the-emotional-impact-and-coping-strategies-in-a-recession/?sh=28119d5a4ac3

Mirbabaie, M., Brünker, F., Möllmann Frick, N. R. J., & Stieglitz, S. (2021). The rise of artificial intelligence: understanding the AI identity threat at the workplace. Electronic Markets, 32, 73–99. https://link.springer.com/article/10.1007/s12525-021-00496-x

World Economic Forum. (2023, December 20). Is AI making you suffer from FOBO? Here’s what can help: The World Economic Forum. Retrieved April 2, 2024, from https://www.weforum.org/agenda/2023/12/ai-fobo-jobs-anxiety/.