A new report from Goldman Sachs indicates that while investors no longer reward companies for announcing layoffs, artificial intelligence is set to trigger another wave of job cuts by 2026 as firms accelerate automation to reduce costs. This warning comes as the global economy is expected to remain broadly stable, highlighting a growing disconnect between economic conditions and job security. Although financial markets have begun to interpret large-scale layoffs as a sign of weak growth prospects rather than efficiency improvements, companies are still expected to proceed with automation-led restructuring. Goldman Sachs stated that companies are increasingly utilizing AI to automate routine and repetitive tasks, thereby controlling headcount growth or directly reducing staff size. The report notes that the push for automation strategy stems more from long-term efforts to reshape cost structures than from short-term economic pressures. The bank anticipates that AI-related layoffs will persist, even as the productivity gains from AI remain uneven and progress is slow. In many instances, companies are cutting jobs in anticipation of future efficiency gains, rather than in response to current improvements in output. This report signals a shift in market behavior; previously, corporate announcements of layoffs were often welcomed by investors. However, Goldman Sachs points out that this relationship has weakened, and markets now tend to view layoffs as a signal that a company is struggling to achieve sustainable growth. Previous reports have indicated that investors have grown increasingly cautious about cost-cutting strategies that could harm long-term innovation and talent pools. Despite this shift in investor sentiment, Goldman Sachs says competitive pressures and the rapid development of AI tools leave many executives with little choice but to streamline their workforce. Over the past year, large-scale layoffs have become widespread across various industries. Large technology companies have led the way in cutting staff, but consulting firms, IT service providers, and traditional enterprises have also reduced headcount as they reorganize their operations around AI systems. Many of these moves are presented as restructuring efforts rather than crisis-induced layoffs. Goldman Sachs stated that roles involving repetitive, rule-based tasks remain at the highest risk, particularly in administrative functions, customer support, and certain areas of professional services. Conversely, demand is expected to rise for specialized roles related to AI development, data governance, and system oversight, although these positions will require significantly different skill sets. The report cautions that this transition is unlikely to be smooth. While AI may ultimately help boost productivity and foster new forms of growth, its benefits could take years to permeate the broader economy. In the interim, companies appear willing to bear the social and organizational costs associated with workforce reductions. For employers, the challenge lies in advancing automation while preserving institutional knowledge and maintaining employee morale. Aggressive cost-cutting measures risk eroding employee trust, especially at a time when competition for high-end digital skills remains fierce. For workers, the outlook remains uncertain. Goldman Sachs notes that as the nature of work evolves, continuous investment in retraining and adaptability will be crucial. However, it also acknowledges that not all displaced workers will be able to transition easily into emerging roles. As companies deepen their adoption of AI technology, the report suggests that job insecurity may become a structural, rather than cyclical, feature of the labor market. Even in a stable economy, the next phase of automation development will reshape how many people work—and determine whether they have a job at all.