Many companies are attributing job cuts to AI adoption, but experts argue AI is often a convenient excuse for layoffs driven by other factors like overhiring and market corrections. Research shows AI hasn’t caused widespread job losses yet, and some firms use AI to retrain or hire employees.
Companies are increasingly blaming AI for job cuts, but critics argue it's just a convenient excuse. From tech firms to airlines, major global companies have been downsizing as the impact of artificial intelligence unfolds, causing employee unease. However, some experts believe AI is being used as a scapegoat for difficult business decisions like layoffs.
Last month, tech consultancy Accenture announced a restructuring plan that includes quick exits for employees who can’t reskill in AI. Shortly after, Lufthansa revealed plans to cut 4,000 jobs by 2030 as it adopts AI to boost efficiency.
In September, Salesforce laid off 4,000 customer support roles, stating AI could handle 50% of the workload. Similarly, fintech company Klarna reduced its workforce by 40% while aggressively implementing AI tools. Language-learning platform Duolingo plans to phase out contractors gradually and use AI to fill those roles.
Despite the gloomy headlines, Fabian Stephany, assistant professor of AI and work at the Oxford Internet Institute, suggests there are deeper reasons behind these layoffs. He argues companies previously hesitated to openly embrace AI but now use it as a convenient cover for workforce reductions.
Stephany is skeptical that these layoffs truly stem from efficiency gains enabled by AI, viewing it more as a way for companies to justify tough decisions. By positioning themselves as AI innovators, companies can appear competitive while masking the real causes of layoffs.
He points out that some firms, like Duolingo and Klarna, likely overhired during the COVID-19 pandemic and are now correcting their staffing levels—a process he calls "market clearance."
Salesforce noted they have successfully redeployed hundreds of employees to other departments like professional services, sales, and customer success. Klarna’s CEO, Sebastian Siemiatkowski, clarified on social media that the workforce reduction from 5,500 to 3,000 over two years involved AI only partially and also included restructuring teams and natural attrition.
Lufthansa and Accenture declined to comment further on their AI-related restructuring plans, and Duolingo did not respond to inquiries.
Research indicates that mass AI-driven layoffs haven’t yet materialized. The Budget Lab at Yale found little disruption in U.S. labor markets due to AI automation since ChatGPT's 2022 launch. Using a “dissimilarity index” to measure shifts in occupational roles, their analysis showed AI hasn’t caused widespread job losses yet.
Similarly, economists from the New York Federal Reserve reported in September that AI adoption among service and manufacturing firms in the New York–Northern New Jersey area hasn’t led to significant employment reductions. AI usage increased among firms—from 25% to 40% in services and 16% to 26% in manufacturing—but few used AI as a reason for layoffs.
Stephany believes layoffs often target employees who lacked long-term job prospects and companies now use AI as a convenient excuse rather than admitting past hiring mistakes.
Online discussions reflect skepticism too. Jean-Christophe Bouglé, founder of Authentic.ly, highlighted in a popular LinkedIn post that AI adoption in large corporations is slower than claimed, with some AI projects being rolled back over cost and security concerns. Yet, many companies announce layoffs "because of AI," which he calls a "big excuse" amid economic slowdowns.
Careers expert Jasmine Escalera says this lack of transparency fuels fear among employees worried about AI replacing jobs. She urges companies to communicate honestly and responsibly to prevent spreading anxiety.
Salesforce confirmed their AI agent, Agentforce, helped reduce customer support cases, cutting the need to replace support engineers. Only 1% of service firms cited AI as the cause of layoffs in the past six months, down from 10% in 2024. However, 12% of service firms reported hiring fewer workers due to AI in 2025. Conversely, 35% used AI for retraining staff, and 11% increased hiring because of AI.
Stephany's research finds no strong evidence of widespread AI-driven unemployment. While some job losses due to AI are inevitable, he doesn’t see mass displacement happening.
He adds that fears about technology replacing human work have recurred throughout history, from ancient times to modern days. Contrary to worries, machines historically boosted productivity and created entirely new job categories—just as the internet gave rise to social media influencers and app developers over the past two decades.