New research based on the European Central Bank’s done in the last quarter of 2025 survey of 5,000 enterprises indicates that artificial intelligence is currently fostering employment growth across the euro area, challenging concerns that the technology is primarily being used to replace human workers. While reports from the United States have highlighted AI-related job cuts at major firms, the data from European companies suggests a different trend where AI-intensive firms are more likely to expand their workforces.
The study reveals a distinct gap between AI usage and actual financial investment. While two-thirds of firms report that their employees use AI, only one-quarter of companies actually invest in the technology. AI adoption rates vary significantly by scale; nearly 90% of large corporations utilize AI compared to 60% of small businesses. However, the positive impact on hiring is most pronounced among smaller firms, whereas the effect on employment at large firms remains neutral.
According to the findings, firms that use AI intensively are 4% more likely to increase their staff levels, and those investing in the technology are 2% more likely to hire. This growth is largely driven by companies using AI to enhance research, development, and innovation. Although 15% of firms cited labor cost reduction as a motivation for using AI, this subset is currently too small to offset the broader positive hiring trends.
A separate survey done by the German economics and survey institute „ifo“ in June 2025, showed that more than 27% of the companies expect job cuts in the next 5 years due to increased use of AI.
