AI Adoption and the Future of Work: Sector Deep Dive

Research evidence excerpt

AI Adoption and the Future of Work: Sector Deep Dive

at an early stage, but the overall sector impact is positive because these companies George W Webb

supply the essential “picks and shovels” of AI adoption. Equity Analyst

George.Webb@morganstanley.com +44 20 7425-2686

For Professional Services, our analysts think that the most durable value creation William Richards

will come from embedding AI into core operating infrastructure as opposed to ResearchWilliam.Richards1@morganstanley.comAssociate +44 20 7425-0269

isolated task automation or headcount reduction. For these companies, the Lee Simpson

opportunity includes both cost savings and new AI-enabled products. In the US, our Equity Analyst

Lee.Simpson@morganstanley.com +44 20 7425-3378

analysts note that employment is being reshaped more through retraining and Nigel van Putten

redeployment than wholesale replacement. In Europe, AI outcomes vary by business Equity Analyst

Nigel.Putten@morganstanley.com +44 20 7425-2803

model - proprietary data and testing look well placed, while staffing and

Amelia M Scicluna

outsourcing firms face greater disruption and pricing pressure. Research Associate

Amelia.Scicluna@morganstanley.com +44 20 7425-6694

Though our surveys indicate that AI is already driving employment churn,

Morgan Stanley & Co. LLC

transcript mentions of AI’s impact on labor remain relatively limited. As of 2Q26, Toni Kaplan

~10% of S&P 500 companies discussed AI’s labor implications, up from ~6% a year Equity Analyst

Toni.Kaplan@morganstanley.com +1 212 761-3620

ago, with commentary most frequent in Financials, Tech, and Industrials. The

incidence was higher among MS AI Adopters, at 18%, suggesting labor Morgan Stanley & Co. International plc+

Annelies Vermeulen

considerations rise with adoption maturity.