AI Workforce Transformation to Force 11 Million Workers Into New Careers by 2035, McKinsey Warns

AI Workforce Transformation Accelerates at Unprecedented Pace

Artificial intelligence is set to trigger what McKinsey calls the largest and most sustained workforce transformation in US history3

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. According to a McKinsey report released this week, approximately 11 million workers—roughly 7% of the current workforce—may need to change occupations entirely by 2035 due to AI-driven job transitions2

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. This worker displacement will unfold at three to four times the historical pace, with about 770,000 workers per year needing to switch their occupations compared to the long-run average of 215,0001

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The McKinsey Global Institute analysis finds that AI and automation will cut demand for about 36 million US jobs by 2035, while economic growth elsewhere creates about 41 million positions2

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. While AI will create more jobs than it kills, the authors argue the real challenge isn't scarcity—it's mobility. "The next decade's challenge is mobility, not scarcity," the researchers wrote, emphasizing that workers may need to switch occupations at rates similar to the pandemic years when about 788,000 workers annually made such moves between 2019 and 20222

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Worker Displacement Hits Lower-Wage Jobs Hardest

The impact of this AI workforce transformation won't be evenly distributed across the labor market. Office and administrative support, retail, transportation, agriculture, fishing, forestry, and technology/analytics face the biggest potential disruption3

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. Lower-wage workers are 7.6 times as likely as higher-wage workers to need a new occupation2

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. Meanwhile, job growth concentrates in healthcare, construction, and management roles.

Anna Kortis, a McKinsey partner who coauthored the report, tells Axios: "We will see new jobs and new roles and a reshaping of roles that emerges, just like other general-purpose technologies did in the past. But this will happen faster and at a bigger scale than in the past"1

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. Even those who don't make occupational switches will see dramatic changes—about 70% of US workers will have to reinvent their roles at some level, requiring workforce preparation and adaptation on a massive scale1

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Skill Gaps and Credential Requirements Create Barriers

Only one in seven displaced workers has a direct path into a growing job—meaning one that needs little retraining and pays at least as much2

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. Nearly half face what the McKinsey report calls an "unpaved" path, blocked by large skill gaps or credential requirements. About 85% of growing jobs require a credential, creating significant barriers for workers attempting occupational switches2

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Geography adds another layer of complexity. About 76% of growing jobs can't be done remotely, including work in hospitals, on construction sites, and in data centers2

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. This means workers may need to relocate to access opportunities, despite already moving between employers less often than in the late 1990s and early 2000s, apart from a brief surge during the pandemic.

Worker Anxiety Rises as Historical Technological Shifts Offer Mixed Lessons

Worker anxiety about AI could change the workforce is already mounting. Employee confidence fell to a new record low in September, according to Glassdoor data, with mentions of AI in employee reviews up 164% from last year1

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. The unemployment rate stood at 4.1% in August, suggesting no job apocalypse has materialized yet1

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. More than a year ago, Anthropic CEO Dario Amodei predicted half of all entry-level white-collar jobs would vanish within one to five years, driving unemployment to between 10% and 20%—a scenario that hasn't come to pass1

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Richard Florida, urbanist and author of The Rise of the Creative Class, told Fortune that automation has transformed work before. "We used to have most people working in agriculture. Now 1% of the workforce works in agriculture," he said. "We used to have most people working in manufacturing—50, 60% working in manufacturing. Now 5 to 6% of the workforce works in manufacturing"2

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. Florida expects displaced service workers to land in wellness work, from fitness and dermatology to Pilates studios, potentially transforming old service jobs into higher-paying wellness positions.

Fast, disruptive technological changes historically spill beyond the workplace, triggering political and cultural consequences. You can draw a line from the Industrial Revolution to widespread labor unrest and union organizing1

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. The question now is whether institutions can help millions navigate retraining and occupational switches quickly enough to prevent similar upheaval as this AI workforce transformation unfolds over the next decade.