The International Labour Organization (ILO) has downgraded its global employment forecast for 2025, cutting the projected number of new jobs from 60 million to 53 million. The drop is a direct reflection of weakening global economic prospects, and it raises serious concerns about the stability of labour markets in the face of geopolitical tensions, technological disruption, and growing inequality.

What this means: A slower job market and economy

The ILO now expects global employment growth to reach just 1.5%, down from the earlier forecast of 1.7%. This downgrade is tied to a revised global GDP growth estimate of 2.8%, down from 3.2%, according to the International Monetary Fund’s April 2025 World Economic Outlook.

This signals that economies are struggling to translate growth into job opportunities. For workers and job seekers, this means fewer openings, stiffer competition, and possibly more precarious work conditions.

The US consumer: A risk factor for 84 million jobs worldwide

Another major concern flagged in the ILO’s World Employment and Social Outlook update is the vulnerability of 84 million jobs across 71 countries, which are directly or indirectly dependent on US consumer demand. These jobs are now increasingly at risk due to escalating trade tensions.

Asia-Pacific is especially exposed, with 56 million jobs tied to the US demand.

Canada and Mexico, though smaller in numbers, are more vulnerable proportionally, with 17.1% of their total jobs potentially impacted.

Imagine a garment worker in Bangladesh sewing clothes for a major American fashion brand. Or a tech support agent in Manila, answering calls and solving problems for US-based customers.

When geopolitical tensions rise - such as a trade war between major economies or sanctions imposed on key industries - these workers often feel the impact first. Orders get cancelled, supply chains stall, and companies cut costs. Jobs that depend on cross-border demand become instantly vulnerable.

Workers in the Global South are not the only ones affected. Consider a steelworker in the US, whose plant scales back production due to rising import tariffs, or a European auto worker affected by parts shortages from Asia. In today's globalised world, the ripple effects of trade instability don’t stop at national borders.

As the ILO report highlights, geopolitical disruptions and unstable trade policies are now major forces weakening the global economy — leading to slower job growth and rising insecurity in both developing and developed labour markets.

Why it’s happening: Tensions, tech, and a broken link between growth and wages

“We know that the global economy is growing at a slower pace than we had anticipated it would. Our report now tells us that if geopolitical tensions and trade disruptions continue, and if we do not address fundamental questions that are reshaping the world of work, then they will most certainly have negative ripple effects on labour markets worldwide,” said ILO Director General Gilbert F. Houngbo.

But there’s more at play than just geopolitics. The labour income share (the slice of GDP that goes to workers) fell from 53.0% in 2014 to 52.4% in 2024, with Africa and the Americas seeing the steepest declines.

Had it stayed constant, workers globally would have earned USD 1 trillion more in 2024, or about USD 290 extra per worker, highlighting how growth isn’t reaching workers' wallets.

This growing disconnect between economic expansion and worker compensation is fueling inequality and eroding trust in the system.

Gender shifts and the skills paradox

There are also signs of a changing employment landscape: Women are increasingly moving into high-skilled jobs, with their share rising from 21.2% in 2013 to 23.2% in 2023. While, men’s participation in high-skilled roles was lower, at around 18% in 2023.

However, occupational segregation persists, women remain underrepresented in sectors like construction and overrepresented in caregiving and clerical roles. 

Meanwhile, education isn’t always translating into better job matches: as of 2022, only 47.7% of workers held qualifications that matched their job requirements. The share of under-educated workers dropped from 37.9% to 33.4%, but over-educated workers rose from 15.5% to 18.9% over the last decade.

AI on the rise: One in four jobs set to change

The ILO also explored the impact of Gen AI, finding that nearly one in four jobs could be transformed by the technology. This means the tasks within these jobs might change. Some tasks may be automated, while others may become more focused on human skills like creativity, communication, or emotional intelligence. 

Medium-skilled jobs, like customer service, administrative assistants, or sales representatives, have the most exposure overall. It means Gen AI could handle many of the tasks these workers do today.

But high-skilled professionals, like lawyers, doctors, software engineers, face even greater task-level automation risks, with many functions now potentially executable by AI tools. It’s a tech tipping point that could reshape careers and industries. 

Even though these jobs are more complex, some of their specific tasks (like writing legal documents or analysing data) are at higher risk of being automated by AI.

Despite the bleak outlook, the ILO stresses that solutions exist: “We can make a difference, and we can do so by strengthening social protection, investing in skills development, promoting social dialogue, and building inclusive labour markets to ensure that technological change benefits all,” added Houngbo. 

In other words, the choices we make now about education, skill training, worker protections, AI governance, and trade could determine whether this forecast becomes a crisis or a catalyst for a better future.