Around 1.22 million workers in Bangladesh’s ready-made garment (RMG) sector could lose their jobs due to the rapid expansion of artificial intelligence (AI), automation and technology-driven production, with women expected to bear the brunt of the disruption, according to a new report by the Centre for Policy Dialogue (CPD).

The report, released on Wednesday, warned that nearly 60% of female employment in the garment sector could disappear by 2041 if Bangladesh fails to adopt adequate policy measures to prepare its workforce for technological change.

The findings were presented by economist and CPD Research Director Dr. Towfiqul Islam Khan during a virtual webinar titled “Changing Work Environments: Foresight on the Future of Work in the Global South.”

According to the report, Bangladesh’s labour market is facing mounting pressure as the country prepares to graduate from the Least Developed Country (LDC) category while simultaneously confronting automation, AI, digital transformation, climate change and shifts in global trade patterns.

The report noted that approximately 1.3 million jobs were lost in Bangladesh in 2024, with women accounting for nearly 90% of those affected.

Dr. Khan said policymakers are struggling to keep pace with rapid changes in employment patterns, pointing to a significant mismatch between the skills produced by the education system and the demands of the labour market. Enrolment in technical and vocational education and training (TVET) remains below 20% at the secondary level, while public spending on education and skills development stands at only 1.3% of GDP.

CPD Distinguished Fellow Dr. Debapriya Bhattacharya said technological transformation, including the AI and automation revolution, is reshaping labour markets worldwide, while structural issues, skill shortages and geographic disparities are making adaptation more difficult for policymakers.

The report also cited World Economic Forum projections that AI and automation could create 11 million new jobs globally by 2030 but eliminate around 9 million existing ones, making workforce adaptability a key determinant of future employment outcomes.

According to the study, manufacturing employment has remained stagnant at around 8.1 million despite higher production, while nearly 25 million people work in the services sector, much of it in low-productivity and insecure jobs.

CPD analysed 27 national and global drivers of change to develop four possible labour market scenarios for 2035. It concluded that digitalisation will be irreversible across all scenarios, employment will increasingly shift toward higher-value services, skills development systems will continue to lag behind demand, exposure to global shocks will persist, and success will largely depend on the effectiveness of state institutions.

The report identified four major policy gaps: the absence of a comprehensive framework for platform and gig workers, inadequate consideration of automation in policymaking, weak alignment between skills development plans and market needs, and a lack of clear implementation roadmaps.

To address these challenges, CPD recommended reforming technical education based on industry demand, introducing lifelong reskilling programmes, linking industrial incentives to employment generation, increasing investment in education and skills development, establishing a national Labour Market Information System (LMIS), extending social protection to platform workers, and adopting inclusive employment strategies for women, youth and persons with disabilities.

The think tank concluded that Bangladesh’s labour market is at a critical turning point and warned that without stronger policy implementation, workforce upskilling and sustained political commitment, future economic growth may fail to generate sustainable and inclusive employment.