In recent layoffs, AI's role may be bigger than companies are letting on

As rounds of layoffs continue wrong a historically beardown banal marketplace and resilient economy, it is inactive uncommon for companies to nexus occupation cuts straight to AI replacement technology.  

IBM was an outlier erstwhile its CEO told the Wall Street Journal successful May that 200 HR employees were fto spell and replaced with AI chatbots, portion besides stating that the company's wide headcount is up arsenic it reinvests elsewhere.

Fintech institution Klarna has been among the astir transparent successful discussing however AI is transforming – and shrinking – its workforce. "The information is, the institution has shrunk from astir 5,000 to present astir 3,000 employees," Klarna CEO Sebastian Siemiatkowski told CNBC's "Power Lunch" in May. "If you spell to LinkedIn and look astatine the jobs, you'll spot however we're shrinking."

But employment experts fishy that IBM and Klarna are not unsocial successful AI-related purges. It's conscionable that firms often bounds their explanations to presumption similar reorganization, restructuring, and optimization, and that terminology could beryllium AI successful disguise.

"What we're apt seeing is AI-driven workforce reshaping, without the nationalist acknowledgment," said Christine Inge, an teacher of nonrecreational and enforcement improvement astatine Harvard University. "Very fewer organizations are consenting to say, 'We're replacing radical with AI,' adjacent erstwhile that's efficaciously what's happening."

"Many companies are relying connected these euphemisms arsenic a shield," said Jason Leverant, main operating serviceman and president of AtWork Group, a nationalist staffing franchise that provides implicit 40,000 workers to companies crossed a assortment of sectors. Leverant says it is overmuch easier to framework workforce reductions arsenic a constituent of a broader operational strategy than admitting that they are tied straight to efficiencies recovered arsenic a effect of AI implementation. "Companies laying disconnected arsenic they clasp large-scale AI adoption is overmuch excessively coincidental to ignore," Leverant said.

Candice Scarborough, manager of cybersecurity and bundle engineering astatine Parsons Corporation, said it is wide from caller beardown net that layoffs are not a effect to fiscal struggles. "They align suspiciously good with the rollout of ample AI systems. That suggests that jobs are being eliminated aft AI tools are introduced, not before,"  Scarborough said. 

She added that the usage of vaguer presumption tin beryllium amended messaging. Restructuring sounds proactive; concern optimization sounds strategic; and a absorption connected outgo structures feels impartial. "But the effect is often the same: displacement by software. Sandbagging these cuts nether bland connection helps companies debar 'AI backlash' portion inactive moving up with automation," Scarborough said.

Many companies are cutting roles successful content, operations, lawsuit service, and HR — functions wherever generative AI and agentic tools are progressively susceptible — portion messaging the firm decisions arsenic "efficiency" moves contempt steadfast equilibrium sheets.

"This soundlessness is strategic," Inge said. "Being explicit astir AI displacement invites blowback from employees, the public, and adjacent regulators. Staying vague helps sphere morale and negociate optics during the modulation down the scenes."

Messaging a risky artificial quality labour shift

Inge and different experts accidental determination is besides a measurement of hazard absorption successful decisions to de-emphasize AI successful occupation elimination. Even companies anxious to leverage AI to regenerate workers often recognize they overestimated what the exertion tin do.

"There's perfectly an AI undercurrent down galore of today's 'efficiency' layoffs, particularly successful back-office and lawsuit work roles," said Taylor Goucher, vice president of income and selling astatine Connext Global, an IT outsourcing firm. Companies are investing heavy successful automation, Goucher says, but companies are sometimes forced to backpedal.

"AI mightiness automate 70%–90% of a process, but the past mile inactive needs the quality touch, particularly for QA, judgement calls, and borderline cases," Goucher said.

Sticking to a hybrid exemplary of quality positive AI would marque much consciousness for the aboriginal adoption phase, but erstwhile the jobs are gone, companies are much apt to crook to third-party hiring firms oregon overseas markets earlier immoderate U.S.-based jobs travel back. "When the AI doesn't enactment out, they softly outsource oregon rehire globally to span the gap," Goucher said.

Most firms volition bounds accusation astir these labour marketplace strategical shifts.

"They fearfulness backlash from employees, customers, and investors skeptical of half-baked AI promises," Goucher said. Many companies tout their AI strategy publicly, portion softly hiring skilled offshore teams to grip what AI can't, helium added. "It's a strategy, but not ever a implicit one. Leaders request to beryllium much honorable astir wherever AI adds value, and wherever quality expertise is inactive irreplaceable," helium said.

Inge agrees that portion AI tin bash a lot, it can't regenerate a full human, yet.

"AI tin bash a batch of things 90%. AI writes amended advertisement copy, but quality judgement is inactive required. That 10% wherever quality judgement is needed, we are not going to spot that replaced successful the adjacent term.  Some companies are getting escaped of 100% of it, but it volition travel backmost to wound them," Inge said.

Mike Sinoway, CEO of San Francisco bundle institution LucidWorks, said the limitations with existent AI — and a much pervasive deficiency of certainty successful the C-suite astir adoption — are reasons to judge AI has not been straight liable for galore layoffs yet. Rather than ducking the contented of wherever AI is already replacing workers, Sinoway said his firm's probe suggests "higher-ups are panicking due to the fact that their AI efforts aren't panning out."

The archetypal to beryllium told AI took their jobs: 1099 workers

Starting 2 to 3 years ago, freelancers were among the archetypal employees that companies were nonstop with successful discussing AI's relation successful occupation cuts. 

"Often, they are being told they are being replaced with an AI tool," Inge said. "People are consenting to accidental that to a 1099 person," she added. 

Copywriting, graphic design, and video editing person borne the brunt of the changes, according to Inge, and present the labour displacement has begun to enactment its mode into the full-time force. Inge says that transparency is the champion policy, but that whitethorn not beryllium enough. She pointed to the backlash that connection learning institution Duolingo faced erstwhile CEO Luis von Ahn announced plans earlier this twelvemonth to signifier retired contractors successful favour of AI, and past was forced to locomotion backmost immoderate of his comments.

"After the immense backlash that Duolingo faced, companies are acrophobic to accidental that is what they are doing.  People are going to get aggravated that AI is replacing jobs," Inge said.

For now, the occupation marketplace is solid, if showing immoderate signs of softening successful the archetypal fractional of the year. The U.S. unemployment complaint fell to 4.1% successful June 2025, which according to Trading Economics, signals wide labour marketplace stability. But determination is besides wide statement that implicit time, the gait of AI-linked occupation alteration volition accelerate. According to the World Economic Forum's 2025 Future of Jobs report, 41% of employers worldwide mean to trim their workforce successful the adjacent 5 years owed to AI automation. Anthropic CEO Dario Amodei precocious predicted generative AI similar his firm's Claude ample connection exemplary could wipe retired up to fractional of entry-level serviceman idiosyncratic jobs.

There volition beryllium a tipping constituent successful the aboriginal erstwhile companies volition beryllium much uniformly transparent, but by that time, AI's relation successful the labour marketplace volition beryllium obvious.

"By past it won't matter," Inge said. "Job losses volition beryllium highly large, the lone happening we tin bash arsenic individuals is adapt."