Actually, AI Probably Isn't Taking Many Jobs, Yet

Headlines aside, there is arguably much less artificial intelligence job displacement than actually is the case, though some might argue for one particular nuance.

And that nuance is that AI is not actually displacing jobs when large enterprise job cuts are announced. Instead, a redirection of spending is envisioned, with the savings on labor being redeployed to support AI infrastructure creation. 

We can argue about whether that actually represents active AI substitution for existing labor, or is mostly a financial move designed to redirect resources to support a huge capital investment wave. 

source: Bret Jensen 

But the “fact” is that such job cuts are not really about AI displacing an existing job. For example, many firms overhired during the labor shortages caused by the Covid pandemic, and are now simply rebalancing. 

Some might call all of this "AI washing,” a strategic financial pivot disguised as an actual immediate substitution of AI for human labor:

• Capital reallocation: Companies cut headcount to free up the massive capital required for AI infrastructure, GPU compute, and model training

• Narrative: Frame a difficult, necessary financial correction as a visionary, tech-driven transformation.

• Efficiency: Reducing headcount in areas that were already overstaffed.

Company	Context of Announcement	Strategic Driver	Source
Meta	Workforce reductions linked to AI restructuring and operations simplification.	Reorganizing toward AI infrastructure; correcting over-hiring.	Financial Express
Amazon	Linked layoffs to efficiency measures and "AI-forward" operations.	Leaner management; funding heavy AI/cloud investment.	Medium
Block	Shrinking workforce citing AI tools accelerating productivity.	Reconfiguring to capitalize on strategic AI priorities.	CBS News
Pinterest	Cuts made to deliver on an "AI-forward" strategy.	Hiring new AI-proficient talent while reducing legacy roles.	CBS News
Cisco	"Hard decisions" made to shift investment toward AI era competitiveness.	Strategic discipline and focus on AI infrastructure.	NSJ Online
Klarna	Initially cited AI for headcount reductions; reportedly faced quality declines.	Experimentation with AI-led efficiency (with evidence of re-hiring).	Reddit (AI Tracking)

A reporting requirement by the state of New York whenever mass layoffs are conducted does not support the notion that AI is responsible for big layoffs there. 

source: Ahmed Abdelfattah

 

“In 2025, the New York Department of Labor updated the state’s Worker Adjustment and Retraining Notification Act system, asking businesses to disclose whether layoffs are related to artificial intelligence,” note Robert Quackenboss, Hinton partner and Michelle Meyer, Hinton associate. “In the year since the change took effect, no business has reported AI as a reason for layoffs.”

“Even though more than 160 different companies have filed WARN notices with the NYS DOL, not a single notice has attributed layoffs to AI technology or automation,” they say. 

To be sure, company resources are being diverted to capex and AI opex, and that is made possible by reductions of force. 

But AI is only an indirect cause, and not because it actually is being used to replace current human labor. 

The immediate cause is a need to invest resources in AI infrastructure. As with any firm resource allocation, there is a zero-sum element: what gets spent in one area means less spending somewhere else.