When I first saw that AI was being cited as a reason for more layoffs, I had a hard time accepting the explanation at face value. According to research by Challenger, Gray and Christmas, AI accounted for roughly 30 to 40 percent of announced job cuts over the previous three months when companies gave a reason. AI had also become the leading stated reason for job cuts for five consecutive months. That sounds like confirmation of something workers have been hearing for years. AI is coming for jobs, but I think what is happening is more complicated than that.
AI has not reached a point where most organizations can remove people from a workflow and expect it to operate without human judgment. However, some companies are making employment decisions based on what they believe AI will do in the future, not currently doing. That distinction matters because I do not think we are simply watching AI replace jobs. I think we are watching companies change which jobs they believe they need.
Most companies citing AI as a reason for layoffs are not describing a technology that replaced a worker outright. AI can assist with tasks but it does not carry the institutional knowledge, judgment and accountability that made those roles necessary in the first place. Institutional knowledge is the unwritten understanding employees build over time about how an organization actually works, including why certain processes exist and how problems have historically been solved. This is something that does not appear in a job description and it disappears the moment the person holding it leaves.
Why Do Companies Say AI Replaced The Job
Companies say AI replaced a job because it is a simpler explanation than describing what the position actually did. A job description does not capture everything an employee knows. Over time, employees learn how certain people work, why certain processes exist and how to get something done when an official process does not work. A lot of that knowledge is never written down.
When organizations eliminate employees, they do not only eliminate salaries and positions but they also lose that knowledge. Someone may look at a finished report and think AI can create that report. What they may not see is the research that went into it, the information that was rejected and the judgment involved in deciding what should be included. The output is only the visible part of the job.
Is This Really A Restructuring In Disguise
Some of what gets called an AI layoff is more accurately a company restructuring itself in preparation for greater AI use. Saying AI replaced a worker is easy to say because it avoids a harder conversation. Organizations need infrastructure to use AI well, including policies, oversight, training and rules about who is responsible when AI-generated work is wrong.
Even Deutsche Bank, while reporting productivity gains from AI, has been monitoring employee token usage and requiring workers who need more capacity to demonstrate value. Adecco Group CEO Denis Machuel has argued that some companies may be blaming AI for cuts that are really connected to underperformance. He has also argued AI is more likely to reshape jobs than eliminate them outright. Instead of losing institutional knowledge and hiring someone for their AI skills, companies could have trained the employees who already had it.
What Happens to The Work That Is Left
More productivity from AI does not automatically mean employees get more time back. It often just means they receive more work, if a task that took four hours now takes two, an organization has a choice. It can give that employee time to focus elsewhere or it can give them another four hours of work.
Too many organizations are choosing the second option which changes the conversation from AI replacing workers to AI changing how much work one person is expected to perform. The same pressure hits entry-level roles and Mid-level employees absorb junior tasks with AI’s help. That control costs now and it also removes the pipeline where people gain the experience organizations will need later.
What This Means Going Forward
Jobs are rarely only a collection of outputs but there is judgment behind the output. There is experience, context and accountability. Also, there is institutional knowledge that never appears in the finished product. That does not mean AI does not belong in the workplace.
I think the future is much more likely to involve humans collaborating with AI than AI simply replacing humans. Companies are still discovering that as they build policies and figure out where oversight remains necessary. The bigger concern is that workers are being affected while that learning process is still happening. Changing which jobs companies believe they need is one thing. Finding out later that they still needed the people who knew how the work actually got done is another.
Frequently Asked Questions
What percentage of layoffs are companies attributing to AI?
Research from Challenger, Gray and Christmas found AI accounted for roughly 30 to 40 percent of announced job cuts over a recent three-month period when companies gave a reason, and AI had been the leading stated reason for job cuts for five consecutive months.
Is AI actually capable of replacing most jobs right now?
No. AI has not reached a point where most organizations can remove people from a workflow and expect the technology to operate independently without human supervision, judgment or input.
Why would a company blame AI instead of describing a restructuring?
Saying a position was eliminated because of AI is simpler than describing a restructuring decision. It avoids harder questions from workers about why they were not trained or retained instead.
Does AI productivity always give employees more free time?
Not necessarily. When AI shortens the time a task takes, organizations often respond by assigning more work rather than giving employees time back.
I am an executive communications strategist with experience in government, media and corporate organizations. I write about AI, the workforce and what responsible communication looks like when technology moves faster than people are ready for.