“AI Will Replace Half of Office Workers Within 5 Years”: U.S. Fed Chair Acknowledges Mass Layoffs Are Inevitable
Just ask the 55,000 laid off by BT.Artificial intelligence has not yet had a significant impact on the U.S. economy — but sweeping changes are unavoidable. That was the warning from Federal Reserve Chairman Jerome Powell, who addressed the Senate Banking Committee on Wednesday during his semiannual monetary policy report. Powell specifically touched on the growing role of new technologies in reshaping the labor market and financial system.
According to Powell, the current effect of AI implementation remains minimal, but he described its future potential as colossal. He noted that the continued development of digital tools could fundamentally reshape the economy and employment landscape.
Still, Powell avoided making specific predictions about timing. He reminded lawmakers that history has shown that the journey from innovation to widespread adoption is usually much longer than tech optimists expect — and neural networks may follow a similar trajectory.
It’s impossible to say how long it will take to shift from experimentation to real economic impact. Powell emphasized that there remains substantial uncertainty regarding both the timing and scale of these potential transformations.
However, early warning signs are already emerging. British telecom giant BT announced last year plans to cut about 55,000 jobs — nearly half its workforce. By 2030, the company expects AI integration to further reduce staffing needs.
Similar concerns were raised by Anthropic CEO Dario Amodei, who predicted that within the next five years, AI could completely replace up to half of all entry-level white-collar jobs, and affect as much as 20% of the global workforce overall.
Salesforce CEO Marc Benioff told Bloomberg that AI already performs 30–50% of tasks within the company — spanning software development, user support, and engineering. According to him, workforce reductions tied to automation will continue. In his words, this is not surprising — it’s a continuation of a long-running trend.
Powell confirmed that the Federal Reserve will be watching these developments closely. But he made it clear: the Fed does not have tools to directly mitigate the social consequences of intelligent machine adoption.
According to various forecasts, AI may impact up to 25% of all jobs worldwide by 2028. The most vulnerable professions include administrative staff, legal professionals, and banking employees. However, the extent of AI’s impact will likely be uneven, depending heavily on government policy and companies’ readiness for change.
As we’ve mentioned before, it’s not all doom and gloom. New jobs and in-demand roles are being created alongside these shifts — especially in AI design, deployment, and oversight. The real question is: can workers adapt fast enough to avoid severe personal and career upheaval?
