MANY MINDEDRegional Businesses Adopt AI Without Mass Layoffs
Regional business surveys from the Federal Reserve Bank of New York indicate 60 percent of service firms and 50 percent of manufacturers adopted AI as of September 2026. This represents a sharp increase from 40 percent of service firms and 26 percent of manufacturers in 2025. Crucially, the surveys found layoffs remained uncommon despite this rapid adoption, with employee retraining identified as the primary workforce adjustment method. AI investments stayed modest, and usage concentrated among a small share of workers within firms.
The mechanism here is a managed transition: firms are integrating AI tools without triggering mass job displacement, primarily through targeted retraining rather than cuts. This directly supports labor stability in the care sector by preventing the displacement of workers during the AI transition period.
This pattern moves abundance for labor security by reducing the risk of sudden job loss during technological shifts. Stable workforce adjustments help maintain income continuity for workers while keeping supply chains resilient—addressing both care needs and goods security through predictable labor transitions.
What to watch: The modest scale of AI investments and concentration of usage among workers suggest this transition remains localized. The data reflects regional business surveys with self-reported adoption rates, limiting nationwide applicability and requiring verification of real-world impact beyond survey responses.
Source: HumanProgress