In response, a growing number of observers contend many businesses are indeed being disingenuous, as they effectively blaming AI for job eliminations they decided to undertake for a variety of other reasons. There are many explanations for why such high profile companies might make that feint.
In Atlassian’s case, the motive could have been pressure from financial markets now betting heavily that AI that’s increasingly automating code writing may put software companies like its own out of business—unless its leaders don’t find a way to prevent that. Skeptics claim creating the appearance of unloading employees and replacing them with those same apps might be a way of calming investor fears.
For other businesses, the objectives driving layoffs could be correcting excessive hiring sprees that were common after the pandemic; pursuit of strategies eliminating entire layers of managers; or seeking the virtually certain surge in share prices as investors reward cost-cutting layoff announcements. When Amazon said in January it was cutting headcount by another 16,000 employees, all those motives appeared to be involved—yet it initially explained the move as handing over more company workload to AI apps.
Similar decisions by more companies to attribute layoffs to the work automation and productivity gains of apps have led critics to call out what they see as a rising tide of AI-washing. One big reason for those doubts is the tech doesn’t appear ready to start shoving human employees aside—at least not in the way most businesses are using it.
Indeed, an MIT study published last August determined 95 percent of businesses that have spent up to $40 billion on AI development and app purchases in the past two years have gotten zero return on their investments. That has reinforced the arguments of some business experts that companies now attributing layoffs to expanding use of AI couldn’t possibly be sacrificing their human assets in favor of the underperforming tech—unless they needed to make those cuts anyway.
“Companies are saying that ‘we’re anticipating that we’re going to introduce AI that will take over these jobs,’” University of Pennsylvania’s Wharton School of Business professor Peter Cappelli recently told The New York Times. “But it hasn’t happened yet. So that’s one reason to be skeptical.”
Data appears to back up that doubt. In January, a study published by research and advisory firm Forrester found that by 2032, AI will probably only fully automate about 6 percent of all U.S. jobs. In the meantime, it warned, most companies now claiming they’re cutting staffing to hand more work to apps will be forced to undo the damage of those hasty dismissals by replacing or rehiring virtually all their departed employees.
“(O)ver-automating roles due to the hype surrounding AI can lead to costly pullbacks, damaged reputations, and weakened employee experiences,” the company said. “Forrester’s 2026 future-of-work predictions further reveal that over half of layoffs attributed to AI will be quietly reversed as companies realize the operational challenges of replacing human talent prematurely.”
But why would employers whose AI adoption and deployment efforts are still in relatively early stages want to claim the apps are driving their layoff plans?
In many cases, critics contend they seek to depict what have become inevitable staff cuts planned for other reasons, repackaging them as bold decisions by businesses on the cutting edge of revolutionary technological change. That temptation is likely especially great for publicly traded companies whose share prices risk suffering if they’re not viewed by investors as pursuing critical, high-growth opportunities.
Yet despite the increasing number and volume of layoff announcements citing automating app use as their justification, there’s evidence supporting doubters’ denunciation of spreading AI-washing.
According to executive placement specialist Challenger, Gray & Christmas, only about 54,900 of the over 1.2 million job cuts made in the U.S. last year were plausibly motivated by AI actually replacing human employees.
Those numbers also appear to support prevailing views about AI-washing on social media network Reddit. Many, if not most contributors to the platform claim companies attributing headcount reductions to their expanding use of apps are merely head fakes by executives reducing staff for the usual reasons.
“(C)ompanies have been using ‘AI’ as an excuse for everything lately when there just trying to cut costs and boost profits,” replied External_Witness845 to an AI subreddit thread titled “US companies accused of ‘AI washing’ in using artificial intelligence for job losses” in February. “The whole pandemic over-hiring thing makes way more sense than some magical AI revolution happening overnight.”
“Yeah, AI isn’t sophisticated (enough) yet for mass displacement,” agreed PliskinRen1991. “When it will be is anybody’s guess. So layoffs are mostly unrelated to AI.”
Another Redditor had an even more pointed response to a separate thread on mass layoffs announcements that were based on increasing use of AI tools.
“100 percent AI-washing,” intelpentium400 responded to news reports of widening app-inspired headcount cuts. “It’s become an easy excuse for everything. Can’t wait for this artificial bubble to pop.”
I wouldn’t be surprised if AI is used as the excuse for employers to fire all the worthless DEI hires they brought in to satisfy Brandon’s regulations and the ESG rankings that state pension fund managers were looking for (big investment money).
LOL!
AI is cutting my grass this afternoon.
We don’t know what to do with all the
worlds useless people(AKA Democrats).
That is the problem.
Back in the day, I managed a bank call center and was a co-owner of the web banking roll out.
Admittedly when the web system rolled out we had a significant reduction in telephone calls (almost 30% by month 2.) But, when it came time for staff cutting we rolled a few more agents who were performing “less than”. It was all based on “the internet.” THAT made it easier because no one would argue with that premise.
I am sure AI is following a similar developmental path.
Fear not!
The Dark Reset has been replaced by Light.
Could somebody start pointing to somebody who has been completely replaced by an AI system?
Because I can point to many people that have been replaced by the 5 million H1B visa holders.
Do a search on “AI Layoff Trap.”
AI also means Always Indians.
“If AI Isn’t Ready to Replace Workers, Why Are Companies Cutting Jobs Anyway?”
simple: they saw elon nuke 80% of twitter employees without a hiccup to the business, and many realized they could do something similar ... they took the 80/20 rule to heart [now 90/10], and thought: “If 80% of the work is done by 20% of my employees, why do i need the other 80%?” ...
Because the AI program told them to fire them?
It’s a great excuse to wipe out the 80% of useless people at companies thanks to DEI and hiring useless college graduates. What I haven’t seen in any of these stories of the positions of those who were fired. There is anecdotal evidence all over podcasts with people laughing at the crying folks who were “I was director of social media relations” “I was assistant diversity branding officer” and other such garbage. I wonder how much economic activity has been wasted on these useless positions in companies? For a laugh always go back to that girl, who the day before getting fired when Elon Musk took over twitter, filmed her work day. She did absolutely nothing all day. “I went to yoga, then I had a latte, then I took a nap in the play room after playing pin pong, and we have these cool pods we can think in” The next day after getting fired, “WAAAAA. Elon fired me. I was so valuable to the company.”
Because they can.