Artificial intelligence (AI)is beginning to reshape employment across Europe and Central Asia, but companies are more likely to slow recruitment and reassign existing workers than carry out widespread layoffs, according to a World Bank report.
Almost 91% of AI-adopting firms surveyed in Romania said the technology had not led to changes in hiring or layoffs, while only 2% of firms in Türkiye reported firing workers because of AI adoption. Just 7% said they had hired workers as a result of the technology, the World Bank said in its October 2026 Europe and Central Asia Economic Update.
The findings suggest that the early effects of AI on employment are appearing more through changes in recruitment and job responsibilities than through large-scale workforce reductions. Interviews with companies adopting AI found that some had reduced their hiring rates but made almost no layoffs, preferring to move employees into other tasks.
The report, titled Making AI Work: Jobs, Firms, and Productivity, cautions that the limited employment impact so far does not mean workers are insulated from future disruption. Some firms interviewed said they could consider workforce reductions as their use of AI expands.
The pattern reflects how businesses are adapting to the technology while weighing its potential to automate routine activities. Companies are increasingly using AI to perform tasks that previously required human input, while employees take on responsibilities involving supervision, handling exceptions and checking the quality of outputs.
Evidence from Türkiye also points to a degree of complementarity between AI and existing workers. An analysis of matched employer-employee data found that firms adopting AI had a larger share of jobs involving tasks that complement the technology than jobs where AI could act as a substitute.
That suggests businesses may initially use AI to improve the work of existing employees rather than replace them, although the report says the longer-term employment effects will depend partly on how workers move between roles.
The findings come as AI adoption spreads across the region, although it remains limited. About 9.4% of firms with at least 10 employees in western Europe and Central Asia used AI in 2025, nearly three times the share recorded in 2021 but still below the European Union average of almost 20%.
The World Bank also points to broader changes in regional labour markets, where hiring has slowed amid moderating economic growth, rising costs and uncertainty. In the first quarters of 2026, many countries recorded modest declines in employment, but widespread increases in unemployment were largely absent.
The report distinguishes this broader slowdown from the direct effects of AI, noting that companies facing weaker demand have been reducing vacancies and postponing recruitment rather than cutting existing jobs.
The potential for future disruption remains significant, particularly in business services and other knowledge-intensive sectors where routine activities can increasingly be automated. The report cites modelling for Poland suggesting AI adoption could reduce employment in knowledge-intensive services, with the extent of permanent job losses depending on workers’ ability to move into other occupations.
The World Bank says governments need to prepare labour markets for the transition by strengthening digital and foundational skills, supporting retraining and developing social protection programmes for workers affected by technological change.
For now, the evidence points to a gradual adjustment in how companies recruit and organise work rather than a wave of AI-driven redundancies. But the report warns that the employment consequences could become more pronounced as adoption deepens and businesses integrate AI into more of their operations.
