Explaining Layoffs

Earlier this year, I posted (not for the first time) an important question How soon might humans be replaced at work. Recent layoffs from Amazon, Salesforce and other tech companies might seem to provide an answer to this question, especially as these companies have explicitly blamed AI for making people redundant.

However, other explanations are available, and Danielle Kaye's article The AI job cuts are here - or are they? includes several sceptical voices, noting that business has always experienced cycles of hiring and firing. Management may be happy to take the credit for the former while avoiding taking responsibility for the latter, thus AI may provide a convenient excuse. Furthermore, explanations of this kind are designed for several different audiences, including investors, customers, and the surviving workforce. Employees who remain may get the message that their jobs are also at risk unless they come to terms with the corporate appetite for AI. Amazon employees themselves are protesting this - see www.amazonclimatejustice.org (HT Karen Hao).

After I originally posted this, Robert Amstrong made a similar point in the FT. Putting lay-offs down to AI sounds better than saying we need to keep margins high so we’re sacking some low performers and politically safer than saying unpredictable Trump tariff policy means we are hiring less young people.

Meanwhile tech companies themselves have a vested interest in hyping the value (or potential value) of AI, therefore claiming to have gained productivity benefits from their own internal AI deployments. For further scepticism on this point, see recent articles by Lindsay Clarke (who was also quoted in my February 2025 post).

Update: A couple of US senators, one from each main party, apparently convinced by the AI ate our jobs narrative, have introduced a bill entitled AI-Related Job Impacts Clarity Act. This would require companies and government agencies to report on the number of layoffs that can be attributed to automation. Brandon Vigliarolo notes the difficulty of separating one layoff cause from another, so there may be more than a hint of sarcasm when he suggests that Hawley and Warner's bill may become essential.

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Robert Armstrong, Lay-offs and AI (Financial Times, 3 November 2025) HT Rachel Coldicutt

Lindsay Clarke, Oracle goes all-in on AI, customers still figuring out how they'll use it (The Register, 16 October 2025)

Lindsay Clarke, AI layoffs to backfire: Half quietly rehired at lower pay (The Register, 29 October 2025)

Danielle Kaye, The AI job cuts are here - or are they? (BBC News, 29 October 2025)

Brandon Vigliarolo, Senate bill would require companies to report AI layoffs as job cuts reach 20-year high in October (The Register, 6 November 2025)

Related posts: Data-Driven Data Strategy (February 2025), How soon might humans be replaced at work? (July 2025)