AI is rewriting jobs more than cutting them: Workday report

Artificial intelligence is changing the nature of work faster than it is eliminating jobs, with business leaders increasingly looking to AI to augment existing workforces rather than reduce headcount, according to Workday’s October 2026 Global Workforce Report.

The report found that 40% of business leaders expect AI to help organisations get more value from their existing employees, while 28% expect the technology to reduce headcount. At the same time, employees are facing fewer opportunities to move into new roles internally, while the skills demanded by employers are changing rapidly.

“Employees may not be changing jobs, but their jobs are changing around them,” said Phil Willburn, vice president, people systems, intelligence & support at Workday. “Leaders need to be honest about what’s different and give people a way to keep up.”

Demand shifts from using AI to building with it

The changing skills landscape is visible in employers’ hiring requirements. An analysis of job requisitions across more than 550 employers using Workday Recruiting found that demand for basic AI skills, including simple prompting, rose through late 2025 before peaking in January 2026 and falling 25% in the months that followed.

By contrast, demand for hands-on AI capabilities such as building AI tools, automating workflows and AI engineering increased 51% between September 2025 and July 2026.

The shift suggests employers are moving beyond basic AI literacy towards workers who can integrate AI into processes and build solutions around the technology.

Employees are aware of the changing requirements, but many say their employers are not providing enough support. In a September 2026 survey of 6,000 full-time employees, 79% said they know which skills they need to succeed, while only 66% said their employer helps them develop those skills.

That creates a 13-percentage-point gap between employees’ understanding of the skills they need and the support available to build them.

Workers nevertheless remain relatively confident about adapting. Some 65% said they were confident they could learn new skills if required. Meanwhile, among employees who use AI for nearly all their work, 62% said they expect AI to make their current skills less valuable, while 76% believe it will create new career opportunities.

However, employers are also reducing their emphasis on some skills that could help workers navigate the transition. 

Mentions of management and leadership skills in job requisitions fell 7%, while training skills declined 13% between September 2025 and July 2026.

Internal career mobility stalls

The changing skills environment is unfolding alongside weaker internal career mobility. Internal moves declined at 57% of employers year over year, while global promotion rates remained largely unchanged.

Employees attempting to move internally cited hiring freezes, a lack of manager support and concerns about the fairness of selection processes among the main barriers. Around half of employees did not attempt an internal move during the past year, with 27% of those workers saying they did not see an attractive opportunity within their organisation.

The slowdown in internal mobility is also contributing to greater competition in the external labour market.

Workday found that 84% of job seekers use AI during their job search. The median number of applicants for each filled role rose to 69, from 58 a year earlier, as AI makes it easier for candidates to apply for more positions.

Despite the increase in applications, the median time to fill a role remained around 60 days, suggesting that a larger applicant pool is not necessarily translating into faster hiring.

Competition has intensified particularly in financial services and technology and media. Applicants per filled role increased 27% year over year in financial services and 40% in technology and media. More than half of applicants in the two sectors — 53% and 57%, respectively — said AI had increased the number of roles they applied for.

Employers continue to cite skills gaps, as well as mismatches around pay, location and flexibility, as reasons why positions remain open.

“The question isn’t just whether someone has done the exact job before,” Willburn said. “It’s whether they can learn fast enough to solve the next problem.”

Employees are staying, but engagement is weakening

The report also points to a disconnect between employee retention and employee commitment.

Voluntary turnover is around 16% annually, while about 70% of employees remain with the same employer two years later. However, employees who plan to stay are less likely to recommend their employer to others across every industry analysed.

The gap is particularly pronounced in the public sector, where employees who intend to stay are 11 percentage points less likely to recommend their employer.

Workday said the findings suggest that lower mobility and a cautious labour market may be encouraging employees to remain in roles without necessarily strengthening their connection to their organisations.

“There’s a lot of quiet unease in the workplace right now,” Willburn said. “Staying isn’t the same as buying in, and companies that treat it that way will pay for it in productivity.”

The findings underline a broader shift in workforce strategy: as AI changes the tasks and skills required within existing jobs, organisations may need to focus less on headcount reduction and more on reskilling, internal mobility and helping employees adapt to changing roles.