AI is taking the blame for layoffs — but analysts say it’s really tariffs, overhiring, and cost-cutting

The rise of artificial intelligence (AI) has left many workers worried about becomings disposable. As US corporate leaders often cite AI-driven efficiency as a reason some roles are no longer needed, those fears don’t feel entirely unfounded.

Just last year, more than 54,000 job cuts were attributed to AI, according to The Guardian, citing a report by Challenger, Gray & Christmas.

Still, economists and technology analysts are not convinced AI alone is behind the cuts, pointing instead to tariffs weighing on businesses, pandemic-era overhiring, and companies looking to trim costs and maximise profits — raising questions about whether US companies are “AI-washing” job cuts.

Just recently, Amazon laid off 16,000 workers, confirming anonymous sources who told Reuters that the number of job cuts would be roughly the same as its 14,000 layoffs in October. The cuts align with the company’s broader plan to trim about 30,000 corporate roles from its workforce.

Amazon human resources chief Beth Galetti said in her October memo announcing the job cuts that “transformative” technology has enabled companies to innovate faster than ever, convincing the company to be organised “more leanly.”

Besides Ms Galetti, other CEOs, like Hewlett-Packard CEO Enrique Lores and  Duolingo CEO Luis von Ahn, also pointed to AI when explaining possible future job cuts.

However, just last month, market research firm Forrester reported that only 6 per cent of US jobs will actually be automated by 2030 — which means the reason most layoffs are happening is, you guessed it, financial.

In fact, a former principal program manager who was laid off by Amazon in October and described herself as a “heavy user of AI” said she was told by a co-worker to bring them up to speed on the work she had been doing so it could be assigned to one of the “new people”.

“I was laid off to save the cost of human labor,” she said.

JP Gownder, Forrester vice-president and principal analyst, added that companies blaming AI may have just overhired during the pandemic.

However, another reason could be political.

The Guardian reported that Amazon allegedly planned to show how US tariffs had raised product prices, which the White House called a “hostile and political act.” An Amazon spokesperson quickly clarified that the report was never approved and wouldn’t happen.

Martha Gimbel, executive director and co-founder of the Yale University’s Budget Lab, said, “By saying that the layoffs are due to new efficiencies created by AI, you avoid that potential pushback.” /TISG

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