AI's Role in Job Displacement: The Struggles of Long-Term Unemployment

Sluggish labor market swells ranks of long-term unemployed, leaving some job seekers frustrated with an ever-shifting hiring landscape. By Crystal Villarreal for Capital & Main Getting laid off can lead to months of uncertainty. But what happens when those months turn into years? When Jacob Sandy left his job as a software engineer in December 2023, he never imagined that he’d still be without work more than two years later. At the time, the tech industry was undergoing massive job cuts, a response to overzealous hiring during the pandemic. Sandy’s employer, a cloud computing platform that helps automate business workflows, did not engage in sweeping layoffs. But he said he began to suspect his employer wanted its staff to quit voluntarily. “It just felt like they were making it miserable and hoping we’d leave,” said Sandy, who lives in San Diego with his school age son. “And for whatever reason, I decided that was the better option.” Sandy said that his first year of unemployment was largely his own choice and that being without a job was initially good for his mental health, until it wasn’t. “I had prepared financially for a year, and I probably started looking very lightly after about six months,” he said. “But what I noticed is all of the recruiting systems around that time were starting to switch over to a more automated, or AI influenced, system. And so I was getting completely ghosted on any applications.” For workers across all sectors, hiring has slowed. While January’s jobs report showed stronger than expected growth, a deeper look at newly updated government data revealed that employers added just 181,000 jobs last year, an anemic rate of hiring and more than a million fewer jobs than previously believed. The unemployment rate has also edged up to 4.3% from 4.0% a year ago. Related | Yup, 2025 really was a horrific year for jobs “The hires rate today looks a lot like the hires rate did coming out of the Great Recession,” said Elise Gould, senior economist at the Economic Policy Institute.  “And you pretty clearly see that the labor market softened over the years. We saw that payroll employment growth slowed pretty substantially.” The stagnant job market, with little hiring or firing, makes it harder for unemployed workers to find their next job. One in four jobless workers is considered long-term unemployed, meaning they have been looking for work for more than 27 weeks, the highest rate since the pandemic. Akilah Adams, an executive assistant based in Atlanta who has been looking for work since June 2025, echoed Sandy’s frustration with the lackluster job market. “Right now, it’s just an extremely different market than any market that I’ve been unemployed in,” said Adams, who worries that she will have to settle for a lower paying job. She’s encountered several scams during her job search, including an interview with an AI chatbot that offered to hire her on the spot in exchange for personal information. A Black woman in her early 40s, Adams said she faces extra barriers to finding a job due to her race and age. And the unemployment numbers support her concerns. At the start of 2025, Black women had an unemployment rate of 5.4%. By December, it had jumped to 7.3%, the highest rate in four years and almost three points higher than the national average of 4.4%. Black women — who are overrepresented among the employees of the federal government — were hard hit by recent federal job cuts. Losses in manufacturing and in professional and business services, where women disproportionately work, also added pressure. The retreat from DEI initiatives both in and outside government may have affected the job prospects of Black women as well. Adams said that a lot of Black women she knows are starting their own businesses and monetizing their skills in response to the shaky job market. Within a month of losing her job, she launched an LLC, offering her services as a remote assistant, but the business has been slow to take off. In January, she had one client who kept her busy for about two hours a week. “So that’s definitely not going to pay any bills,” she said. Adams is also competing with workers across the globe, who can offer much lower rates. She’s seen ads for remote assistants based in the Philippines, where workers earn significantly less than they do in the U.S. Adams has the support of her husband, who works full time, but others aren’t so lucky. For Charlotte Wilson Langley, a children’s television writer living in Los Angeles, the options for staying afloat are dwindling fast as both she and her husband lack stable employment. During Christmas last year, Wilson Langley was applying for retail jobs without success. She’s been repeatedly told she’s overqualified. Meanwhile, she is living on credit and selling her clothes on Poshmark just to make ends meet. “Every time that I was able to make my rent la