Companies cut about 1.1 million jobs this year, the most since the covid-19 pandemic. However, the notion that those layoffs are occurring due to technological advancements, as if the majority of those roles are now filled by artificial intelligence, doesn’t quite align with the data. According to data from consulting firm Challenger, Gray & Christmas, about 55,000 layoffs were attributed directly to AI—less than 1% of all job losses.
One industry where layoffs were common this year was tech, with many of the Big Tech firms cutting off large chunks of their workforce. Those often came with platitudes about streamlining and modernizing roles, with vague gestures toward the idea that AI will be stepping in. As Amazon started preparing to lay off workers in June, CEO Andy Jassy told employees that AI would mean the company would “need fewer people doing some of the jobs that are being done today.” But in October, after cutting 14,000 people loose, Jassy told investors the decision was “not even really AI driven, not right now at least.”
That’s not to say the introduction of AI hasn’t truly cost people jobs. Corporations like Salesforce, for instance, have gleefully sent humans home and started to make claims that as much as 50% of all work is now completed by AI. But if AI has had an effect on the workforce, it seems like it isn’t directly causing layoffs but is instead blocking new hires. Not only are people losing work, but companies also aren’t hiring—and entry-level roles in particular have been hard hit by the misguided idea that their roles can be filled by AI. Meanwhile, an MIT study published this summer found that 95% of organizations that have launched AI initiatives have seen zero financial return on their investment.
The layoffs that have hit workers are real, of course. But AI may simply be a useful scapegoat for companies that want to appear like they are embracing automation and being forward-thinking when the reality is they either overhired in recent years while the economy was booming and now want to cut back as profit margins get thinner, or have been extremely hard hit by a turbulent economy plagued by the Trump administration’s tariff regime. The manufacturing industry, which should be booming with the massive data center construction projects cropping up across the country, has lost nearly 60,000 jobs since the start of the year. It’s not AI taking those roles.
In the same Challenger, Gray and Christmas report that shows 55,000 jobs were lost directly to AI, more than twice as many were attributed to restructuring, about four times as many were blamed on market and economic conditions, and nearly six times as many were chalked up to cuts made by the Department of Government Efficiency and the downstream impact of those decisions. It’s a good reminder that even when AI is attributed as the reason for a job cut, the decision was made by an executive who has done the math and determined that axing human labor in the name of “modernization” will likely boost the stock price.
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