HR Tech Europe Special Coverage

AI sets up white-collar versus blue-collar jobs duel

AI and machine learning

Talent Management

By:

Erik Sherman

Date:

May 26, 2026

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In the new world of generative artificial intelligence, jobs have become a critical topic. A debate is being held on whether a large number of white-collar employees will find themselves out of work or if the seemingly unquenchable need for new data centers could keep phalanxes of people in skilled trades busy.

The truth is partly there, but the details are messy, according to various experts who spoke with GlobeSt.com.

Broad concerns exist about AI replacing people. Outplacement consultancy Challenger, Gray & Christmas reported that April job cuts rose 38% over March, from 60,620 to 83,387, though that was down 21% from the 105,441 cuts announced in April 2025. What makes the last two months stand out was AI as the leading reason for the layoffs. Last month, it made up 26% of total cuts, accounting for 16% of all 2026 workforce reduction plans. Closings and cost-cutting were the next two most common reasons.

But company reports do not necessarily provide a clear view.

“Putting hard numbers on drivers of white-collar job loss with a brand new general purpose technology is a very imprecise process with tons of unproveable assumptions,” Steve Hochman, managing director, Americas for Nagarro, a business transformation consultancy that uses AI, tells GlobeSt.com.

“In other words, any hard impact estimate should be taken with a giant grain of salt.” Part of the explanation for the rise in the layoffs was due to overhiring during the pandemic in the near-zero interest rate environment, according to Joel Marotti, senior managing partner at career coaching firm Vertical Media Solutions.

“When those rates jumped, the math just didn’t make sense anymore,” he explained. “Layoffs were coming regardless. AI is a more flattering or exciting story to tell investors, when in reality these companies over-hired and we’re seeing that correction now.”

Younger white-collar workers face stark choice due to AI

For younger people, there seems to be a stark choice, as CNBC reported. There is a slowdown in hiring this group for entry-level jobs in areas that are exposed to AI automation, such as marketing, legal, accounting, human resources and IT.

With the ongoing demand for more data centers, does this mean a coming shift for younger people to skilled blue-collar jobs? Yes and no.

“The bigger issue, honestly, isn’t whether jobs will exist,” Patrick Murphy, founder & CEO of Togal.AI and chief investment officer of Coastal Construction, tells GlobeSt.com. “It’s whether we have enough skilled workers to build what’s coming. Right now, the construction industry already faces a major labor shortage. The average skilled tradesperson is aging out, fewer young people entered the trades over the last two decades, and now we’re simultaneously trying to build AI infrastructure and address housing shortages.”

The timing reflects deep labor market pressures. The Bureau of Labor Statistics’ 2024 data show these essential occupations growing at least as fast as average—around 4% from 2024 to 2034—and HVAC mechanics and installers increasing at 8%. Yet growth alone doesn’t solve the gap.

Across the trades, replacement needs remain high: plumbers, pipefitters and steamfitters will see roughly 44,000 annual openings; carpentry will require about 74,100; HVAC work will need nearly 40,100 and ironwork will require about 7,000.

BlackRock Foundation has pledged $100 million in grants over the next five years to nonprofit and workforce development organizations to reach an estimated 50,000 workers.

But that may be only a temporary solution.

“The key issue is timing: data-center buildout creates a lot of project labor now, but far fewer permanent jobs later,” Hochman says.

This article was originally published on GlobeSt, a sister site of HR Executive. For more content like this delivered to your inbox, sign up for GlobeSt newsletters here.

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Erik Sherman

Erik Sherman, a contributing writer for GlobeSt, has served as a journalist, content marketing writer and communications consultan for such publications as the Wall Street Journal, New York Times Magazine, Fortune, Inc and more.

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