Minneapolis Federal Reserve President Neel Kashkari said artificial intelligence is prompting large companies to slow hiring as businesses begin to see tangible productivity gains from the technology. Speaking on CNBC, Kashkari said many firms report that AI is influencing workforce planning, leading to a labor market marked by low hiring and low layoffs.
Kashkari said the trend is more pronounced among large corporations than smaller businesses, describing AI adoption as primarily a big-company phenomenon. He noted that while some firms remain cautious, many that were skeptical about AI two years ago are now actively deploying the technology across operations.
Since the launch of OpenAI’s ChatGPT in 2022, US companies have invested billions of dollars in AI tools aimed at improving efficiency and automating tasks. Those investments have fueled investor enthusiasm but also raised concerns about job displacement and long-term labor market effects.
Kashkari acknowledged that some misallocation of capital is occurring as companies race to adopt AI. Still, he said consistent feedback from executives suggests the technology is already delivering real productivity improvements, reinforcing expectations that AI will continue to reshape how large organizations operate and hire.
Recent data underscore these shifts: AI was cited as a factor in more than 55,000 U.S. layoffs in 2025, European banks are planning cuts affecting over 200,000 roles by 2030, and a joint MIT–Oak Ridge study found AI could replace nearly 12% of U.S. jobs, exposing $1.2 trillion in wages across finance, healthcare, and professional services.
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