A recent McKinsey Global Institute report projects that automation and AI adoption will significantly reshape the U.S. workforce by 2035, potentially impacting 36 million jobs or about 21% of labor demand. While the expanding AI economy could generate over 40 million new roles in the next decade, approximately 11 million workers—around 7% of the workforce—may need to transition to entirely new occupations. Meanwhile, 25 million workers are expected to remain in their current positions, although the nature of their work is likely to evolve due to technological augmentation.

The report highlights the top occupations most vulnerable to automation, including office and administrative support, manufacturing, retail, food service, and transportation. For example, around 81% of work hours in office roles could be affected, leading to a potential 38% reduction in labor demand. Other sectors such as technology, business and finance, and legal jobs are also poised for change, but some functions may be augmented rather than replaced, allowing workers to shift their focus to more complex or creative tasks.

McKinsey researchers emphasize the difference between theoretical automation possibilities and actual implementation, which depends heavily on managerial decisions within organizations. The estimated 11 million workers facing displacement could experience diverse outcomes; while some have direct pathways to new roles requiring similar skills, nearly 45% might confront challenges such as the need for geographic relocation, substantial reskilling, or accepting lower wages. This transition will require an accelerated occupational shift rate, roughly 3.6 times higher than historical averages.

To navigate this evolving labor landscape, McKinsey advocates for coordinated efforts by employers and government to invest in reskilling programs. Workers are also encouraged to develop adaptive skills like problem-solving, communication, and continuous learning to enhance resilience and secure better job opportunities in an AI-driven economy. The report underscores that as technological change accelerates, adaptability and lifelong learning will be key for workforce sustainability.