Artificial intelligence (AI) could affect more than 40 per cent of jobs in Ireland, the IMF is warning – either replacing them or complementing them. It comes as the fund said Ireland was “relatively more exposed” than other advanced economies to “novel” economic risks that the technology poses to employment and also to financial markets.
In a preliminary report on the findings of its latest mission to Ireland published on Monday, the Washington-based fund said that AI can be associated with “productivity gains”. However, realising those gains requires continuous reskilling and upskilling of the labour force, it said.
Facebook parent, Meta, is cutting 20 per cent of its Irish workforce – 350 jobs – as the group looks to make savings to fund its investment in AI, it emerged last week.
Separately, software group Oracle has told the Government it plans to axe some 150 Irish jobs, about 15 per cent of its workforce in the Republic, as the group deals with a cash crunch related to spending on AI.
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Without policies that help workers adapt and “acquire new skills”, the IMF says that some people can be left behind, undermining “inclusive” economic growth.
Against this backdrop, the Coalition should also look at policies, including “affordable housing”, that make it easier for workers to move between jobs and geographic areas for employment, it said.
Ireland’s “high reliance” on multinational enterprises also continues to be “a source of vulnerability”, the IMF warned.
Commentators have sounded alarm bells around a potential ongoing AI investment bubble, which has helped drive global stock markets to new records over recent months. Investors are betting big on companies that say they are implementing AI tools within their businesses to cut costs and boost productivity.
The IMF said the “rapidly evolving landscape of AI poses novel risks” to the Irish economy, including “steep financial market corrections” if large multinationals revise their expectations for “AI-driven productivity gains”.
Speaking to reporters in Dublin on Monday, IMF mission chief to Ireland Yan Sun said the country was “well positioned” to benefit from the “AI transformation”.
However, she said that based on the agency’s estimates, some 40 per cent of jobs globally could be exposed – either replaced or complemented – by the technology and its adoption.
“This is at a global level,” she said. “I think, of course, the number [...] could be higher [than 40 per cent] for some advanced countries. Definitely, Ireland’s exposure to AI transformation is higher than most advanced countries.”
Still, Sun said that the IMF was forecasting only a “slight increase” in Irish unemployment this year, “but nothing extraordinary”.
Government sources said last week that they anticipated further AI-related job cuts over the coming months.
[ ‘Lower-value human capital’: banking boss too honest about AI job lossesOpens in new window ]
Speaking to reporters in Galway last Thursday, Taoiseach Micheál Martin said “there is certainly an AI trend beginning, but it’s unclear”.
In a message aimed to workers facing lay-offs, Minister for Enterprise Peter Burke said: “The Government will have your back – we will support you to gain employment again.”
Meanwhile, the agency said the Coalition will need to look at temporary budget measures to support households in the aftermath of the inflation shock caused by the US-Israeli war on Iran.
However, the IMF stresses that measures should be “temporary” and “targeted” at the vulnerable, rather than broad-based ones like “tax cuts, subsidies and price controls”.
Minister for Finance Simon Harris said last week that he considers “cutting people’s income tax and allowing people to keep more of their own money” as “an important thing to do when people are under cost-of-living pressures”.
On Saturday, the IMF said European Union countries will face large bills for defence, energy and pensions in the next 15 years, suggesting a mix of reforms, consolidation and joint borrowing as a way to manage that.
“If left unchecked, public debt will be on an unsustainable path. Under unchanged policy, debt of the average European country would reach 130 per cent of GDP by 2040 – roughly doubling from today,” the IMF said in a paper used as a basis for EU finance ministers’ discussions at an informal meeting in Nicosia.
The paper said that to prevent such a scenario, EU countries must improve incentives for citizens to move around the 27-nation bloc to find work and for companies to hire them.
The EU should also integrate its energy markets, make it easier for citizens’ savings to flow across the bloc into profitable investments and unify laws that now often differ from country to country. Pension reforms and a higher retirement age would also help, it said. – Additional reporting: Reuters
