IMF Managing Director Kristalina Georgieva has warned that artificial intelligence is hitting the labor market like a "slow-moving tsunami," with roughly 40% of jobs worldwide ultimately affected and fresh graduates bearing the heaviest blow.

Singapore President Tharman Shanmugaratnam called on governments to make "crisis-era style" support measures a permanent feature and to introduce incentives encouraging companies to hire new graduates.

World Bank President Ajay Banga backed the development of "small AI" tools and urged governments to mobilize private capital to create jobs for 1.2 billion young people.

On October 7, 2026, in Singapore, at the warm-up event for the IMF annual meetings, IMF Managing Director Kristalina Georgieva (right) shook hands with Singapore President Tharman Shanmugaratnam.

Policymakers are no longer debating whether AI will disrupt employment; instead they are issuing stark warnings that AI is already bringing labor market disruption and recommending policies to cushion its negative effects.

IMF Managing Director Kristalina Georgieva warned on Monday that AI is sweeping across global labor markets like a "slow-moving tsunami," with fresh graduates set to bear the brunt.

"The group we need to worry about first is young people about to enter the labor market," Georgieva said at a panel discussion on Monday. "Normally, young people start with routine, repetitive work and then gradually move up. But if those jobs disappear, I don't think any young person would see waiting tables at a coffee shop as their career destination."

Also speaking on the panel, Singapore President Tharman Shanmugaratnam, who co-chairs the World Bank Jobs Council, called on governments to turn "crisis-era style" support measures into standing policy tools to help young people find work. He said the policies countries adopted during the COVID-19 pandemic and, in some cases, the global financial crisis "should no longer be treated as emergency crisis measures, but incorporated into the structural policy toolkit."

This means governments need to work with the private sector and introduce incentives to encourage companies to hire fresh graduates, because "demand for the first basic jobs that graduates take as they enter the workforce is now shrinking," Tharman said.

These remarks show that, against a backdrop in which rapidly aging populations in Asia and elsewhere would already shrink the labor force, policymakers are no longer debating whether AI will disrupt employment but focusing instead on how to cushion its impact.

Also at the panel, World Bank President Ajay Banga estimated that 1.2 billion young people will turn 18 over the next 15 years. The private sector creates 75%-85% of jobs in each country, and the vast majority of new jobs will need to be absorbed by the private sector.

He said the government's role is to make that happen: improving infrastructure, setting policies, de-risking private capital, and removing the risks that prevent investors from deploying funds at scale. "It's private capital that creates jobs," he said.

Georgieva said the IMF estimates that about 40% of jobs worldwide will ultimately be technology-enabled, downgraded, or eliminated outright. In advanced economies, about 60% of jobs are affected, compared with 23% in low-income countries. But poorer countries are not better off; that lower share is "simply because AI adoption has not yet arrived."

Tharman said the job-squeezing effect is most pronounced in the tech sector. He added that in the United States, "for the first time in a century, demand for graduates has declined," and the wage premium from a university degree is steadily narrowing. Without action, an entire generation of graduates will lose more than a year of skills accumulation, and "people will lose confidence in the future."

"Whether you love it, hate it, or fear it, it's here"

AI was also a hot topic this year. Georgieva said AI-related investment and trade have boosted output in some economies. Despite energy supply shocks, AI has helped keep global economic growth at close to 3%. "Whether you love it, hate it, or fear it, AI is here, and we have already seen the first wave of impact," Georgieva said, adding that AI adoption could raise growth in advanced Asian economies by 0.5-1 percentage point and in emerging Asian economies by 0.2-0.8 percentage points. Under an optimistic scenario, that growth "would be enough to fully offset the economic losses from population aging."

Tharman cautioned that economic growth alone does not necessarily translate into more jobs. "China, India, and some developing countries in Southeast Asia are growing reasonably well, but job creation is weak." If countries respond passively, AI "will further widen this divide between growth and employment."

Still, he said, AI-driven job displacement will happen "task by task, step by step," which "gives us time to respond" — provided workers can engage in on-the-job learning and universities shift toward applied talent development models.