Some Texas companies using AI say it’s lowering demand for employees

Accounts payable. Order processing. Communications and marketing work.

Texas executives say certain business tasks are being replaced by artificial intelligence, and 10% of the companies across the state using AI attribute it to a decreased need for human workers, according to a new survey from the Federal Reserve Bank of Dallas. 

The survey results, which were published in late May and came as part of a supplemental feature to the Dallas Fed’s widely watched monthly business outlook surveys, were based on responses from more than 300 executives across the state and offer rare insight into how the new AI reality is unfolding in one of the world’s largest economies. 

The survey also showed that two-thirds of Texas businesses are using AI to at least some degree, with executives overwhelmingly reporting productivity gains from employees who do. 

“I think the big question in terms of the labor market is, ‘Is AI automating or augmenting workers?’ ” said Emily Kerr, a senior business economist at the Dallas Fed. “ ‘Is it replacing or enhancing workers?’ That’s like the big, open question. And from our survey over the past couple years, as we’ve been asking about this, the answer continues to be both.”

The Dallas Fed survey’s release comes at a seemingly pivotal moment for the world-changing technology. Three-and-a-half years since the public release of ChatGPT, AI has remade stock markets, led to broad GDP gains and rearranged aspects of daily life for millions of people around the world. 

Yet in recent months so much exuberance has given way to what’s been dubbed an “AI backlash,” prompted largely by fears about widespread job losses as some corporate executives cite the technology for manpower reductions. Last month, days after Meta cut 8,000 workers as part of a larger pivot to AI, the pope published a 42,000-word encyclical calling for the technology to be “disarmed.” Big name tech founders have been getting booed at commencement speeches. A flurry of polling has shown Americans are increasingly more AI-pessimistic than optimistic.   

“People just feel like they’re under siege,” Sen. Josh Hawley, R-Mo., who in November introduced a bill along with Sen. Mark Warner, D-Va., to require companies to report AI-related layoffs, recently told a reporter. 

The Dallas Fed’s survey found that 66% of Texas firms are using AI at least to some degree. Among those firms, 10% said the technology has decreased their need for workers, and 1% said it had increased the need for workers. Seventy-six percent said AI has not impacted their need for workers, and 4% said it had changed the type of workers the firm needs but not the number of workers.  

The survey was based on responses collected in mid-May from executives from the state’s manufacturing and service sectors and did not specify whether a decreased need for workers had translated into actual layoffs. It also distinguished between slight and significant impact from the technology on companies’ workforce needs, with interpretation of the two categories left up to the respondents. 

Of the firms incorporating AI, far more executives — 8.9% of that group — said the technology had “slightly decreased” the need for workers, while 1.5% said it had “significantly decreased” their need for workers.

Of the AI-using firms that said the technology had increased their need for workers, an equal number — 0.5% — pointed to slight versus significant impact.  

The bank’s questions also left room for nuance related to the firms’ AI adoption, distinguishing between various levels of usage. Among the businesses using AI, most — 63% — said AI tools are part of the business’ core processes or operations, while 35% said the technology was mostly happening “on an ad hoc basis.” 

Use is also often limited to certain team members, with 52% of the firms using AI responding that AI tools are used “regularly by a small share of employees” and 21% indicating they’re used “regularly by many employees.” Another 26% of the respondents reporting AI use also said that AI tools “are being tested or piloted” but are not used regularly.  

Service sector executives also cited higher levels of AI usage compared with manufacturing executives, as well as more impact on worker needs. 

Overwhelmingly, the firms using AI also said that AI has boosted productivity for the employees who are using it. 

“As firms are using this technology, that’s what they’re trying to leverage it for — to get more efficient,” said Kerr. “And I think that efficiency can come in two ways: It can come by making your workforce more efficient, and it can also come from maybe potentially reducing some payroll costs if there is a position that’s able to be automated.” 

The survey also asked respondents to describe specific tasks or jobs that have been replaced by AI: One manufacturing executive from the printing sector pointed to art and communication while an executive from plastics and rubber manufacturing pointed to order processing, accounts and engineering work. Various executives from the service sector pointed to tasks that included marketing, coding, graphic design, customer support and programming. 

While the Dallas Fed’s survey likely represents the most comprehensive look to date on Texas firms’ AI implementation, Kerr also cautioned against drawing overly sweeping conclusions about AI’s impact on the state economy, emphasizing that the survey provided a lot of room for subjectivity and did not include hard numbers on AI-driven job eliminations. 

“There’s still important pieces that we don’t yet have an understanding of,” Kerr said, although she added that the bank’s researchers were striving to take on those bigger questions as AI rapidly evolves. 

Yet the long-term direction of Texas firms’ AI adoption has been clear. In April 2024, the first time the Dallas Fed began asking Texas executives about AI, the firms’ adoption rate was 38%, and in May 2025 it was 59%. In December of last year — the most recent previous survey — it was also 66%, suggesting that in recent months firms’ embrace of the technology may have flattened, although in the new survey 18% of respondents also said they were planning to adopt AI in the next year. 

Among Texas firms that say they’re using AI, the percentage that pointed to a decreased need for workers in the latest survey — 10% — was also slightly higher than in the previous Dallas Fed surveys. A separate report from two researchers at the bank, published in January, found that young American job seekers in AI-exposed occupations have been particularly impacted.