Businesses More Open to Blaming AI for Layoffs

Companies are growing increasingly comfortable revealing that artificial intelligence is behind job cuts.

Earnings reports, investor presentations and company memos all show executives citing AI efficiency gains while touting a shrinking workforce as a way to prepare for an AI-centered landscape, Bloomberg reported Wednesday (Nov. 19).

AI has been named as a factor in 48,414 job cuts so far this year in the U.S., the report said, citing estimates from outplacement firm Challenger, Gray & Christmas. Nearly two-thirds of those cuts came in October.

The spike mirrors a rise in planned layoffs in general, with AI referenced as a factor in roughly 20% of U.S. layoffs last month, according to the report.

Behind all this is a debate about whether companies are using AI advances to lower costs, or simply citing AI as a factor to simplify complicated and unflattering reasons to better appeal to investors, the report said.

U.S. companies were holding onto workers in a “low hire, low fire” labor market, but are now cutting jobs amid pressure from tariffs and declining consumer sentiment, according to the report.

Many large businesses, especially in the tech space, also “overexpanded during the post-pandemic boom and ended up with very large labor forces,” said George Denlinger, an operational president at staffing agency Robert Half, who added that this means an emphasis on AI can, in some cases, be misleading, per the report.

“They talk about using AI to do those jobs in the future, which can amount to a kind of ‘AI-washing,’” he said, according to the report. “They blame AI even though it is not the only reason layoffs are happening.”

The PYMNTS Intelligence report “Workers Say Fears About Gen AI Taking Their Jobs is Overblown” found that 54% of workers who were employed, seeking work or studying when surveyed said generative AI posed a “significant risk of widespread job displacement.”

This concern was more pronounced among people familiar with generative AI platforms at 57% versus those unfamiliar at 41%.

“Despite broad concern about general displacement, 38% of workers feared that generative AI could eventually lead to the elimination of their specific jobs,” PYMNTS wrote in May. “This personal job fear was higher among those using generative AI at least weekly (50%) compared to unfamiliar users (24%).”

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