Ireland’s labour market is “particularly exposed” to artificial intelligence (AI), and younger workers in highly digitised sectors are the most at risk group, the Department of Finance has warned.

The department’s latest economic insights paper has said AI has the potential to “significantly reshape” labour markets over the medium to long-term, with implications for productivity, job creation and the nature of skills demand.

“Ireland’s labour market is particularly exposed to AI given the high concentration of employment in knowledge-intensive sectors such as ICT, financial services and professional activities,” the department warned.

The department said it has found evidence AI may have already influenced employment patterns in Ireland, with “at risk” sectors experiencing weaker employment growth in recent years relative to less-exposed sectors.

“These effects appear to be concentrated among younger workers, in particular in the ICT sector – consistent with international evidence which suggests that AI adoption is having its most pronounced impacts on entry-level and junior employees in highly digitalised sectors,” it said.

Postings from jobs platform Indeed indicate Ireland’s labour market is currently undergoing rapid change, with AI-terms mentioned in over 11 per cent of all job postings as of November, up from 4 per cent in November 2023 – around three times the share of both the EU and US.

The Irish economy has a high concentration of employment in knowledge-intensive services, including in “highly exposed” ICT, financial services and professional activities sectors, the department noted.

Due to the make-up of the Irish economy, it may be “among the first” advanced economies where early AI labour market impacts become measurable.

At the same time, the rate of growth in AI skills demand in Ireland “has been striking”. The share of postings mentioning AI almost doubled between November 2024 and November 2025, having already doubled in the preceding year.

“This rapid pace of growth, combined with the scale of AI-related skills demand, suggests Ireland’s labour market is at the global frontier of AI adoption, and is likely to be among the first countries to face more widespread AI-driven labour market disruption,” the department said.

While there is “clear evidence” of strong and growing demand for AI-related skills in a variety of occupations, it is not known “how broadly” AI is being deployed across different sectors.

“It may be the case that AI adoption is currently concentrated among large multinational technology firms and has not yet diffused more widely across other sectors of the economy,” the department said.

Data from 2024 indicated just over half of large enterprises use AI technologies in Ireland, compared with just 12 per cent of small sized enterprises.

AI is having its “most visible effects” among recent graduates in occupations with higher AI exposure and low complementarity.

The department pointed to US research which found that since the release of ChatGPT, early-career workers aged 22-25 in the most AI-exposed occupations have experienced a 16 per cent relative decline in employment.

In contrast, employment has remained stable or continued to grow for workers in less exposed fields and for more experienced workers in the same occupations.

“AI-related labour market adjustments have occurred mainly through changes in hiring and entry, rather than through the displacement of existing workers,” the department said.

“This is logical: younger workers are more likely to be concentrated in entry-level or junior roles where tasks may be more easily automated, whereas older workers are more likely to work in senior or managerial roles which require greater levels of responsibility and human judgment.

“In addition, it is likely that it is easier for firms to manage headcount by slowing or pausing new recruitment, rather than making existing staff redundant given the potential costs associated with redundancies.”