International Monetary Fund (IMF) Managing Director Kristalina Georgieva has issued a stark warning that an impending “artificial intelligence tsunami” is poised to reshape global labour markets, with young workers and the middle class likely to bear the brunt of the disruption.
Speaking on the final day of the World Economic Forum (WEF) annual meeting in Davos, Georgieva said rapid advances in artificial intelligence could affect up to 60% of jobs in advanced economies, either by enhancing, transforming, or completely eliminating them. Globally, she estimated that around 40% of jobs would feel the impact of AI in the coming years.
“This is like a tsunami hitting the labour market,” Georgieva told delegates, citing IMF research that points to a sweeping transformation in the demand for skills as AI adoption accelerates.
Entry-Level Jobs at Greatest Risk
According to the IMF chief, entry-level roles are particularly vulnerable, as many of the tasks typically performed by younger workers are among the first to be automated.
“Tasks that are eliminated are usually what entry-level jobs do at present,” Georgieva said. “So young people searching for jobs find it harder to get to a good placement.”
This, she warned, could make it significantly more difficult for young workers to enter the workforce and climb the career ladder, potentially reshaping long-term employment patterns.
Middle Class Could Be ‘Squeezed’
While some workers may benefit from AI, Georgieva cautioned that the gains will not be evenly distributed. She noted that one in ten jobs in advanced economies has already been ‘enhanced’ by AI, often resulting in higher pay and positive spillover effects for local economies.
However, those whose jobs are not directly augmented by AI face a different reality. Without productivity gains, they risk wage pressure and job insecurity, particularly in clerical, administrative, and routine professional roles.
“So the middle class, inevitably, is going to be affected,” Georgieva said, warning of a potential squeeze on incomes and job stability.
‘AI Is Moving Faster Than Regulation’
Georgieva also expressed deep concern over the lack of adequate regulation governing artificial intelligence, calling it her greatest fear.
“This is moving so fast, and yet we don’t know how to make it safe. We don’t know how to make it inclusive,” she said. “Wake up—AI is for real, and it is transforming our world faster than we are getting ahead of it.”
She stressed the urgency of developing global frameworks to ensure AI is deployed responsibly and benefits society broadly, rather than deepening economic divides.
Lagarde Warns of Rising Inequality and Global Mistrust
The IMF chief was joined on the panel by European Central Bank President Christine Lagarde, who warned that the AI boom could be undermined by rising geopolitical tensions and trade barriers, particularly as the US imposes new tariffs.
“We are dependent on each other,” Lagarde said, pointing out that AI development is capital-intensive, energy-intensive, and data-intensive. Without international cooperation and shared rules, she warned, countries could face shortages of capital and data needed to sustain innovation.
“We are in a bind, let’s face it,” Lagarde added.
She also highlighted the risk of widening global inequality, cautioning that economic disparities are “getting deeper and bigger” as technological gains remain unevenly distributed.
Tech Leaders Echo Concerns
Earlier at Davos, Microsoft CEO Satya Nadella struck a similar note of caution, warning that AI could lose its “social permission” to consume scarce resources such as energy if it fails to deliver broad-based benefits.
Nadella argued that AI must demonstrate tangible societal value—such as breakthroughs in medicine—rather than concentrating gains within a handful of powerful technology firms.
A Defining Moment for Jobs and Growth
The discussion took place during a session titled “The Great Rebalancing: Artificial Intelligence, Jobs, and the Future of Inclusive Growth” at the UAE Pavilion, underscoring the scale of the challenge facing policymakers.
As AI rapidly transforms economies, global leaders now face a critical test: how to harness its productivity gains while preventing widespread job displacement and deepening inequality—especially among young workers and the middle class.
