Artificial intelligence (AI) is rapidly reshaping manufacturing industries worldwide, but a new study suggests the transition may come at a psychological cost for employees, particularly in emerging economies where workforce protections and digital preparedness remain limited.
Researchers investigating AI-integrated manufacturing firms in Pakistan found that AI-induced job insecurity significantly increases employee burnout, while psychological safety and confidence in working with AI systems can help buffer workers from the negative emotional impacts of technological disruption.
The study, published in Human Systems Management, surveyed 208 employees working in manufacturing sectors undergoing AI-driven transformation, including textiles, surgical instruments, and leather production industries. Using Partial Least Squares Structural Equation Modeling (PLS-SEM), the researchers examined how fears related to AI adoption influence employee well-being and workplace behavior.
The findings revealed that employees who fear job displacement, role marginalization, or skill obsolescence due to AI integration are significantly more likely to experience burnout, including emotional exhaustion and disengagement from work. The researchers found that these effects become stronger when workers perceive low levels of psychological safety in their organizations.
Psychological safety refers to employees’ belief that they can openly communicate concerns, ask questions, seek support, or make mistakes without fear of punishment or embarrassment. According to the study, AI-related uncertainty can erode this sense of interpersonal safety, especially in workplaces with hierarchical structures and limited transparency during technological change.
The researchers also identified AI self-efficacy as a critical protective factor. Employees who reported higher confidence in their ability to learn, use, and adapt to AI technologies experienced less decline in psychological safety and were better able to cope with job insecurity. In other words, workers who believe they can successfully engage with AI systems are more resilient during digital transformation.
“Our findings show that successful AI integration depends not only on technological infrastructure but also on psychosocial readiness,” the authors explained. “Organizations must ensure that employees feel supported, informed, and capable during periods of technological change.”
The study developed and tested a moderated mediation framework integrating Conservation of Resources (COR) Theory, the Job Demands-Resources (JD-R) Model, Social Cognitive Theory (SCT), and Uncertainty Management Theory (UMT). Results confirmed that psychological safety partially mediates the relationship between AI-induced job insecurity and burnout, while AI self-efficacy moderates the impact of insecurity on psychological safety.
Researchers emphasized that the challenges identified in the study are especially relevant in emerging economies, where rapid digitalization often outpaces workforce training and institutional support systems. In such contexts, employees may face technological disruption without adequate opportunities for reskilling or career transition support.
The authors recommend that organizations adopt human-centered AI implementation strategies that prioritize employee well-being alongside technological advancement. Suggested interventions include AI literacy and reskilling programs, transparent communication regarding AI adoption plans, ethical leadership practices, and initiatives designed to foster psychologically safe work environments.
The researchers argue that AI transformation should not be viewed solely as a technological or economic process, but also as a human and organizational challenge requiring long-term investment in employee resilience and support systems.
The study contributes to growing international discussions surrounding the psychological and social consequences of AI adoption in workplaces and highlights the importance of balancing innovation with workforce sustainability in industrial settings.
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AI-induced job insecurity and employee burnout: The moderating role of AI self-efficacy in emerging market manufacturing
6-Apr-2026
The authors declare no competing interests.