The rise of AI-driven automation is reshaping labor markets worldwide, impacting workforce skills, employment structures, and job creation dynamics. While AI offers opportunities to enhance productivity and innovation, it also raises concerns about job displacement and skills gaps. This chapter explores the dual impact of AI on the workforce, examines reskilling strategies, and discusses policy interventions needed to ensure an inclusive and sustainable transition. Drawing on global case studies and empirical evidence, we provide insights for managing workforce transformation across diverse economic contexts.