Over the last year, US corporate leaders have often explained layoffs by saying the positions were no longer needed because artificial intelligence had made their companies more efficient, replacing humans with computers.<\/p>\n
But some economists and technology analysts have expressed skepticism about such justifications and instead think that such workforce cuts are driven by factors like the impact of tariffs, overhiring during the Covid-19 pandemic and perhaps simple maximising of profits.<\/p>\n
In short, the CEOs are allegedly engaged in \u201cAI-washing\u201d.<\/p>\n
\u201cYou can say, \u2018We are integrating the newest technology into our business processes, so we are very much a technological frontrunner, and we have to let go of these people,\u2019\u201d said Fabian Stephany, a departmental research lecturer at the Oxford Internet Institute.<\/p>\n
In 2025, AI was cited as a reason for more than 54,000 layoffs, according to a December report from the consulting firm Challenger, Gray & Christmas<\/a>.<\/p>\n In January, Amazon alone laid off 16,000 workers<\/a> after making 14,000 reductions in October.<\/p>\n Beth Galetti, senior vice-president of people experience and technology at Amazon, explained in an October memo<\/a> that they were trimming staff because \u201cAI is the most transformative technology we\u2019ve seen since the internet, and it\u2019s enabling companies to innovate much faster than ever before.<\/p>\n \u201cWe\u2019re convinced that we need to be organized more leanly,\u201d Galetti added.<\/p>\n The Hewlett-Packard CEO, Enrique Lores, also said in a November earnings call<\/a> that the company would use AI to \u201cimprove customer satisfaction and boost productivity\u201d, which means the company could cut 6,000 people in the \u201cnext years\u201d.<\/p>\n In April, Luis von Ahn, CEO of the language-learning app company Duolingo, announced that<\/a> the venture would \u201cgradually stop using contractors to do work that AI can handle\u201d.<\/p>\n But the reason for such layoffs is often actually financial, according to a January report<\/a> from the market research firm Forrester. The company projects that only 6% of US jobs will be automated by 2030.<\/p>\n Companies could use AI to replace people working in call centers and technical writing, but they don\u2019t yet have apps that can replace most occupations and probably won\u2019t soon, said JP Gownder, a Forrester vice-president and principal analyst.<\/p>\n \u201cA lot of companies are making a big mistake because their CEO, who isn\u2019t very deep into the weeds of AI, is saying, \u2018Well, let\u2019s go ahead and lay off 20 to 30% of our employees and we will backfill them with AI,\u2019\u201d Gownder said. \u201cIf you do not have a mature, deployed-AI application ready to do the job \u2026 it could take you 18 to 24 months to replace that person with AI \u2013 if it even works.\u201d<\/p>\n But there are benefits to attributing layoffs to AI even if that is not the case.<\/p>\n For example, the Challenger report stated that tariffs were cited as the reasons for fewer than 8,000 layoffs, a fraction of the number attributed to AI.<\/p>\n \u201cMost economists would tell you that that was implausible,\u201d said Martha Gimbel, executive director and co-founder of the Budget Lab at Yale University. \u201cChatGPT was only released three years ago \u2026 It is not the case that a new technology develops and the workforce adjusts immediately. That is just not how it works.\u201d<\/p>\n After a news report<\/a> stated that Amazon planned to display how much Donald Trump\u2019s tariffs increased product pricing, the White House described it as a \u201chostile and political act\u201d.<\/p>\n An Amazon<\/a> spokesperson then said, \u201cThis was never approved and is not going to happen.\u201d<\/p>\n \u201cYou have seen a real hesitance among some parts of corporate America to say anything negative about the economic impacts of the Trump administration because they feel that there will be consequences,\u201d Gimbel said. \u201cBy saying that the layoffs are due to new efficiencies created by AI, you avoid that potential pushback.\u201d<\/p>\n CEOs could also be blaming layoffs on AI advancements when they actually just overhired during<\/a> the pandemic, Gownder said.<\/p>\n \u201cThat was driven by low interest rates. That was driven by talent wars. That was driven by some dynamics that are not in place any more,\u201d he said.<\/p>\n Still, there are instances where CEOs linked layoffs to AI where that is more likely to be the legitimate reason, the economists said.<\/p>\n For example, Marc Benioff, CEO of the cloud-based software company Salesforce, said during an interview on the podcast The Logan Bartlett Show<\/a> that he reduced his customer staff from 9,000 to 5,000 because he now uses AI agents.<\/p>\n \u201cI need less heads,\u201d he said.<\/p>\n Stephany said that was plausible.<\/p>\n \u201cThe work that has been described \u2013 particularly online and customer support \u2013 is, in terms of tasks and required skills, relatively close to what current AI systems can perform,\u201d Stephany said.<\/p>\n But that does not mean the public should just accept Benioff\u2019s claim, the AI researchers said.<\/p>\n \u201cI think CEO statements are possibly the worst way to figure out how technological change is affecting the labor market,\u201d Gimbel said. \u201cThat is not to say that CEOs are lying \u2026 It\u2019s to say that there\u2019s incentive effects in what gets covered.\u201d<\/p>\n Not long after Amazon\u2019s vice-president linked the October layoffs to AI, the CEO, Andy Jassy, backpedaled<\/a>.<\/p>\n He said they were \u201cnot really financially driven, and it\u2019s not even really AI-driven, not right now. It really is culture.\u201d<\/p>\n