Fears about AI’s impact on employment are growing globally. As with any major technological shift, excitement and anxiety sit on opposite ends of the scale. Right now, fear seems to have the upper hand.

More people worry about AI taking their jobs than those who feel confident about adapting to the changes it brings.

A recent Ipsos study found that 65% of respondents across 31 countries and regions fear that AI will lead to significant job losses in their nation – up from 64% last year. This concern is particularly pronounced in Southeast Asia, where AI-driven displacement feels like an impending reality.

In Malaysia, 73% of workers expressed anxiety about AI replacing jobs – well above the global average.

However, in Indonesia (85%) and the Philippines (81%), the worry runs even deeper, as workers brace for automation’s growing influence.

Even in technologically advanced Singapore, 67% of respondents fear that AI could lead to widespread job losses. These figures underscore the region’s growing unease as AI adoption accelerates, reshaping industries and traditional job structures.

The tension between job loss and job creation

While AI has the potential to create new jobs, optimism is in short supply. The Ipsos survey reveals that only 43% of respondents globally believe AI will generate more employment – highlighting a stark gap between expectations of job loss and job creation.

China stands as an outlier, where 77% of respondents believe AI will lead to more jobs rather than displace workers. This contrast suggests that a nation’s economic policies, workforce adaptability, and AI-driven investments significantly shape public perception.

Meanwhile, in Malaysia and other Southeast Asian nations, scepticism reflects concerns over whether workers are truly ready to transition into new roles.

Despite Malaysia’s efforts – such as the Malaysia Digital Economy Blueprint, which aims to enhance digital capabilities – bridging the skills gap remains a challenge.

The World Economic Forum’s recent Future of Jobs report adds to the concern, stating that 41% of companies globally plan to reduce their workforce by 2030 due to AI-driven automation. This reinforces the notion that businesses will need fewer human employees as AI advances.

However, there is a silver lining: the same report highlights that 77% of companies plan to retrain or upskill their workforce to work alongside AI. This suggests that businesses recognise the need to balance automation with human employment.

The psychological impact of AI on workers

Beyond the tangible risk of job displacement, AI anxiety is taking a toll on workers’ mental wellbeing. The fear of redundancy fuels stress, insecurity, and a loss of professional identity.

Work is more than just a livelihood – it’s tied to a person’s sense of purpose. The idea of being replaced by a machine can erode self-esteem and leave workers feeling powerless.

This anxiety is further amplified by media narratives, which often spotlight AI’s potential to eliminate jobs rather than its ability to augment human capabilities.

Psychologists have long studied the impact of job insecurity on motivation and engagement, showing that uncertainty about the future lowers productivity and job satisfaction.

If AI is seen as a force that undermines rather than enhances human work, resistance to technology adoption is likely to grow.

To counteract AI anxiety, experts emphasise the importance of adaptability. Workers should see AI as a tool for productivity rather than a direct competitor.

“AI can appear sinister at first glance – an otherworldly force poised to replace human expertise. Yet understanding and harnessing AI can open doors to innovation, efficiency, and personal growth. We might be surprised by how beneficial it can be to step closer,” said Jonathan Gabay, a senior lecturer at Oxford College of Marketing in the UK.

When we look closer at what frightens us, we often discover possibilities rather than perils – not just related to it – but the pearls within ourselves,” Gabay said.

Cultivating skills such as creativity, critical thinking, and problem-solving – areas where AI still struggles – can help employees stay resilient in an evolving job market.

Businesses, too, have a role to play. Providing AI training and ensuring employees feel empowered, rather than threatened, will be key to a smoother transition into an AI-driven future.

Yet, as they are setting up their employees for AI upskilling, employers can allay people’s fears by being transparent about the changes taking place at work.

“All this noise around AI leads to two specific questions in the minds of the confused employees: what happens to my job now, and how do I prepare for this new technology so that I am future-ready?” said Anbu Ganapathi Muppidathi, president and CEO at Qualitest, which provides engineering solutions powered by AI.

If leaders don’t answer these questions correctly, employees will migrate to places where they feel their jobs are safe or supported, otherwise known as attrition,” Muppidathi said.

Citing data from HR tech giant UKG – which found 54% of employees “have no idea how their companies are using AI” – Muppidathi warned against the spread of the wrong information on AI.

“With this kind of misinformation or misunderstanding, employees will start to prepare for the perceived changes independently, and the distraction will show up in their current work outputs or productivity loss,” he said.

5 lessons for HR and business leaders on handling AI anxiety

1. Proactive reskilling is a business imperative

With 41% of companies planning to downsize due to AI, waiting until jobs are lost to start retraining is too late. Businesses must invest in continuous learning programmes that equip employees with skills in AI collaboration, problem-solving, and creativity – areas where human expertise remains irreplaceable.

2. AI adoption requires a people-first approach

Workers’ fear of redundancy can lead to disengagement, lower morale, and resistance to AI adoption. HR leaders must focus on AI as an enabler, not a replacement, ensuring employees feel supported rather than sidelined. Transparent communication, clear career pathways, and AI upskilling initiatives will be crucial.

3. Psychological safety matters as much as skills

The anxiety surrounding AI isn’t just about technical skills – it’s also about job security and professional identity. HR leaders should foster an environment where employees feel valued and empowered, with opportunities to redefine their roles alongside AI rather than be replaced by it.

4. AI strategies must align with local workforce realities

China’s optimism about AI job creation contrasts sharply with Southeast Asia’s concerns. This underscores the need for AI strategies that reflect local economic policies, workforce readiness, and digital literacy levels. Businesses must tailor their AI integration plans to address the unique anxieties and strengths of their workforce.

5. Business leaders must champion AI literacy

Many AI fears stem from misconceptions rather than reality. Business leaders must take an active role in educating employees about AI’s capabilities and limitations. Demystifying AI, offering hands-on training, and highlighting real-world examples of AI augmenting human work can shift the narrative from fear to opportunity.