The AI Layoff Trap

In his latest Policy & Profit column in The Star, our Managing Director, Amir Isyam Abdul Rahim, explores one of the most important policy questions surrounding artificial intelligence: How can Malaysia harness AI’s productivity gains without weakening the very economy it seeks to grow?

While AI has the potential to drive significant long-term productivity and economic value, Amir argues that an unmanaged transition could create an “AI Layoff Trap”—where widespread automation reduces labour costs but also erodes consumer purchasing power and government tax revenues, ultimately undermining long-term economic resilience. Drawing lessons from the First Industrial Revolution, the article highlights why developing economies such as Malaysia face particularly high transition risks.

Rather than resisting AI, the article calls for proactive and pragmatic policymaking. This includes establishing clear guardrails that encourage responsible AI adoption while strengthening workforce resilience, supporting business competitiveness, and ensuring the benefits of technological progress are shared more broadly across society.

Ultimately, the piece argues that Malaysia’s success will depend not on whether we adopt AI, but how we manage the transition—ensuring innovation strengthens, rather than weakens, our economy, our workforce, and our long-term competitiveness.

📖 Read the full article in The Star:

https://www.thestar.com.my/business/insight/2026/06/20/the-ai-layoff-trap

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