AI job cuts? Not as bad as execs say.
Layoffs blamed on AI or automation are tiny compared to total job losses this year, according to a new report from Challenger, Gray & Christmas.
Out of 286,679 planned layoffs, only 20,000 are linked to automation — and just 75 explicitly tied to AI. 
Senior VP Andrew Challenger said,
“Far less is happening than people imagine. There are roles that can be significantly changed by AI right now, but I’m not talking to too many HR leaders who say AI is replacing jobs.”
That clashes with warnings from Amazon CEO Andy Jassy and Ford CEO Jim Farley. Jassy said AI would “reduce our total corporate workforce as we get efficiency gains” but didn’t give a timeline. Farley claimed AI could replace “literally half of all white-collar workers in the U.S.” but later context shows he was mostly referring to blue-collar workforce changes.
The real effect so far: companies are cutting hiring and diverting budgets toward AI tools amid tough economic conditions — partly due to tariffs and inflation worries.
Josh Bersin, CEO of workforce consultancy The Josh Bersin Company, explained this trend:
“There’s basically a blank check to go out and buy these AI tools. Then they go out and say, as far as head count: No more hiring. Just, ‘stop.’ So that immediately freezes the job market.”
Shopify and Duolingo have told employees to prove they need headcount beyond what AI can cover. Shopify CEO Tobi Lutke wrote,
“What would this area look like if autonomous AI agents were already part of the team? This question can lead to really fun discussions and projects.”
Duolingo’s Luis von Ahn added teams will get budget only if they can’t automate work with AI.
Microsoft has cut 15,000 jobs this year, including 40% of recently cut software engineers. Satya Nadella said AI now writes about 30% of Microsoft’s code.
But layoffs also aim to offset costs for massive AI data center builds, an analyst told Reuters:
“We believe that every year Microsoft invests at the current levels, it would need to reduce headcount by at least 10,000.”
Capital Economics analysts warned,
“For some firms, AI is a way to spin job losses driven by poor financial performance in a more positive light.”
AI is also shaking up HR. IBM CEO Arvind Krishna said hundreds of HR roles were replaced by AI, but that freed up budget to hire programmers and salespeople:
“While we have done a huge amount of work inside IBM on leveraging AI and automation on certain enterprise workflows, our total employment has actually gone up, because what it does is it gives you more investment to put into other areas.”
Indeed Hiring Lab chief economist Svenja Gudell summed it up:
“Our research has shown that AI will fundamentally change a whole lot of jobs, some by a lot… But does it still mean AI took that job? I don’t think so. There’s not evidence that it’s fully replacing whole workers, or that the current slowdown can be attributed to it.”
