If AI Isn’t Ready to Replace Workers, Why Are Companies Cutting Jobs Anyway?

A growing number of experts argue that many companies blaming artificial intelligence for job cuts are masking more familiar financial and strategic pressures.

BY BRUCE CRUMLEY @BRUCEC_INC

Illustration: Inc; Photo: Getty Images

The good news for employees worried about the countless predictions of a looming job apocalypse from artificial intelligence (AI) taking work away from humans has not been borne out—at least not yet. However, that hasn’t prevented an increasing number of companies from citing productivity gains made by using those task automating apps as the reason for thousands of recent layoffs they’ve made.

But now, a growing chorus of critics have begun denouncing most of those staff reductions as cynical, manipulative “AI-washing” of headcount reductions that employers feel forced to make—and for reasons entirely unrelated to the emerging tech.

Those accusations have grown louder in recent weeks as companies including Amazon, Pinterest, Hewlett-Packard, Oracle, Meta, and others have announced headcount cuts they’ve either partially or fully attributed to the work automating capabilities of AI. More recently, tech innovator Jack Dorsey explained he was eliminating about 4,000 jobs—or about 40 percent of all positions—at his fintech company Block on the logic “intelligence tools have changed what it means to build and run a company.”

Shortly after that, software firm followed suit by Atlassian saying it would cut 10 percent of its workforce, or 1,600 people, as AI apps take over departing employees’ work.

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“Our approach is not ‘Al replaces people,’” Atlassian CEO Mike Cannon-Brookes told staff in explaining the layoffs. “But it would be disingenuous to pretend AI doesn’t change the mix of skills we need or the number of roles required in certain areas. It does.” 

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.

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