Ohver the past year, U.S. business executives 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.
But some economists and technology analysts have expressed skepticism about such justifications and instead believe such workforce reductions are driven by factors such as the impact of tariffs, excessive hiring during the Covid-19 pandemic and perhaps simply profit maximization.
In short, CEOs would be engaging in “AI-washing”.
“You can say, ‘We’re integrating the latest technologies into our business processes, so we’re really at the technological forefront and we need to let go of these people,'” said Fabian Stephany, a research professor in the department at the Oxford Internet Institute.
In 2025, AI was cited as the cause of more than 54,000 layoffs, according to a December report from the consultancy. Challenger, Gray and Christmas.
In January, only Amazon laid off 16,000 workers after achieving 14,000 reductions in October.
Beth Galetti, senior vice president of human experience and technology at Amazon, explained in an October memo that they were downsizing because “AI is the most transformative technology we’ve seen since the Internet, and it’s enabling businesses to innovate much faster than ever before.”
“We are convinced that we need to be organized in a simpler way,” Galetti added.
Hewlett-Packard CEO Enrique Lores also said in a November earnings call that the company would use AI to “improve customer satisfaction and increase productivity,” meaning the company could cut 6,000 jobs over the “next few years.”
In April, Luis von Ahn, CEO of language learning app company Duolingo, announced that the company would “gradually stop using subcontractors to do work that AI can handle.”
But the reason for these layoffs is often financial, according to a January report from market research firm Forrester. The company predicts that only 6% of U.S. jobs will be automated by 2030.
Companies could use AI to replace people working in call centers and technical writing, but they don’t yet have applications that can replace most professions and probably won’t do so soon, said JP Gownder, vice president and principal analyst at Forrester.
“A lot of companies make a big mistake because their CEO, who isn’t very familiar with AI, says, ‘Well, let’s go ahead and lay off 20 to 30 percent of our employees and we’ll replace them with AI,'” Gownder said. “If you don’t have a deployed, mature AI application ready to do the job… it could take you 18 to 24 months to replace that person with AI – if it even works.” »
But there are benefits to attributing the layoffs to AI, even if it doesn’t.
For example, the Challenger report states that tariffs were cited as the cause of fewer than 8,000 layoffs, a fraction of the number attributed to AI.
“Most economists would tell you it was implausible,” said Martha Gimbel, executive director and co-founder of the Budget Lab at Yale University. “ChatGPT only launched three years ago… It’s not true that a new technology develops and the workforce immediately adapts. That’s just not how it works.”
After a reporting said Amazon planned to display how much Donald Trump’s tariffs raised the price of products, the White House called it a “hostile and political act.”
A Amazon The spokesperson then said: “This was never approved and it will not happen. »
“You’ve seen a real hesitation on the part of some parts of the American business community to say anything negative about the economic impacts of the Trump administration, because they think there will be consequences,” Gimbel said. “By claiming that the layoffs are due to new efficiencies created by AI, you avoid this potential backsliding.”
CEOs might also blame layoffs on advances in AI when in reality they are just overhired for the pandemic, Gownder said.
“It was due to low interest rates. It was due to the war for talent. It was due to certain dynamics that no longer exist,” he said.
There are, however, cases where CEOs associate layoffs with AI, where it is more likely to be the legitimate reason, economists say.
For example, Marc Benioff, CEO of cloud-based software company Salesforce, said during an interview on the podcast The Logan Bartlett Show that it reduced its customer staff from 9,000 to 5,000 because it now uses AI agents.
“I need fewer heads,” he said.
Stephany said it was plausible.
“The work that has been described – particularly online support and customer support – is, in terms of the tasks and skills required, relatively close to what current AI systems can perform,” Stephany said.
But that doesn’t mean the public should simply accept Benioff’s claims, AI researchers said.
“I think CEO statements are probably the worst way to understand how technological change affects the job market,” Gimbel said. “That doesn’t mean CEOs are lying…It means there are incentive effects in what’s being covered.”
Shortly after Amazon’s VP linked the October layoffs to AI, CEO Andy Jassy backpedaled.
He said they’re “not really driven by finances, and it’s not even really focused on AI, not at the moment. It’s really about culture.”
And months after Duolingo’s CEO said the company would be “AI first” and would only increase its headcount “if a team can’t automate more of its work,” he told the New York Times that the company had never laid off full-time employees and had no plans to do so.
“Since the beginning, we have used contractors for temporary tasks, and our number of contractors has gone up and down as needed,” he said.
An employee fired by Amazon in October described herself as a “heavy user of AI.”
“I created some tools specifically for my team, as well as some of our customer teams,” said the former senior program manager, whose last day at Amazon was in January and who asked not to be identified to protect her privacy because she has not yet received a severance package.
She doesn’t think AI was the reason she was let go, but rather that it “maybe helped with the ability to give some of the work to a younger person.”
After an employee told her, “Let me know about the things you were working on. We’re going to give this to one of these new people,” it became clear “that this work was not going to stop but that they were going to find someone who was paid a lot less to do this work,” she said.
She added: “I was laid off to save the cost of human labor. »