Klaus Wadefelt | DigitalVision | Getty Images
As a round Layouts continue In the historic stock market and elastic economy, it is not common for companies to directly associate layoffs with AI alternative technologies.
IBM is an outlier Its CEO told the Wall Street Journal In May, 200 hours of employees were released and replaced with AI chatbots, and also pointed out that the company’s overall employee count is in reinvestment elsewhere.
Fintech company Klarna has always been The most transparent When discussing how AI transforms and shrinks its workforce. “The fact is that the company has shrunk from about 5,000 people to nearly 3,000 employees now,” he said. CNBC’s “Electric Lunch” in May. “If you go to LinkedIn and look at the work, you’ll see how we shrink.”
However, employment experts suspect IBM and Klarna are not AI-related cleanings. It’s just that companies often limit their interpretation to terms such as restructuring, restructuring and optimization, and the term may be disguised AI.
“What we might be seeing is an AI-driven workforce reshaping,” said Christine Inge, a coach at Harvard’s major and executive development. “Very few organizations are willing to say, ‘We are replacing people with AI, even if that’s actually what’s happening.”
“Many companies rely on these euphemisms as shields,” said Jason Leverant, chief operating officer and president of the national talent franchise ATWork Group, providing more than 40,000 workers to companies across departments. Leverant said it is much easier to make workforce reductions an integral part of a broader operational strategy, rather than acknowledging that they are directly related to the efficiency of AI implementation. “It is a coincidence that companies lay off employees when they accept large-scale AI adoption and cannot be ignored,” Leverant said.
Candice Scarborough, Director of Cybersecurity and Software Engineering ParsonsJudging from the strong recent revenue, layoffs are not a response to the financial struggle. “They fit very well with the introduction of large AI systems. This suggests removal after the introduction of AI tools rather than before,” Scarborough said.
Using more vague terms can be better messaging, she added. Restructuring is proactive; business optimization sounds strategic; attention to cost structure feels fair. “But the result is often the same: displaced through software. Sandbags with bland language can help companies avoid ‘AI rebound’ while still before automation,” Scarborough said.
Many companies rule roles in content, operations, customer service, and human resources – the increasingly capable capabilities of generative AI and proxy tools – while passing company decisions out as they move as “efficiency” despite a healthy balance sheet.
“This silence is strategic,” Inger said. “The clear statement of AI displacement can trigger a counterattack from employees, the public, and even regulators. Keeping blur during the behind-the-scenes transition helps maintain morale and manage optics.”
Artificial Intelligence Labor Transfer that Conveys Risk
Inge and other experts say there is also a level of risk management in decisions to eliminate AI at work. Even companies that are eager to replace workers often realize that they overestimate what technology can do.
“There is definitely an undercurrent of AI, especially in the backend and customer service roles,” said Taylor Goucher, vice president of sales and marketing at IT outsourcing firm Connext Global. Goucher said the company has invested heavily in automation, but sometimes companies are forced to back off.
“AI may automate 70%–90% of a process, but the last mile still requires human touch, especially for quality checks, judging phone calls and edge cases,” Goucher said.
Sticking to the hybrid model of Human Plus AI makes more sense for the early adoption phase, but once the job disappears, companies are more likely to turn to third-party recruiting companies or overseas markets before any U.S.-based jobs return. “When AI doesn’t work, they’ll quietly outsource or bridge the gap globally,” Guche said.
Most companies will limit information about these labor market strategic shifts.
“They are concerned about the skeptical opposition of employees, customers and investors for half-life AI commitments,” Goucher said. He added that many companies openly tout their AI strategies while quietly hiring skilled offshore teams to deal with things AI can’t do. “It’s a strategy, but it’s not always a complete one,” he said.
Inge agrees that while AI can do a lot, it can’t replace the entire person.
“AI can do a lot of 90% of the things. AI writes better copy of ads, but it still requires human judgment. In cases where human judgment is needed, we won’t see in the near future replacement. Some companies get rid of 100% of judgment, but it will be back,” Inge said.
Mike Sinoway, CEO of San Francisco software company Lucidworks, said the current restrictions on AI and the more common restrictions in C-Suite regarding adoption – believe that AI is not directly responsible for many layoffs. Instead of avoiding the issue that AI has replaced workers, Sinoway says his company’s research shows: “Higher people are panicking because their AI efforts are not phased out.”
The first to be told about AI’s job: 1099 workers
Starting two to three years ago, freelancers were the first employees companies to discuss the role of AI in layoffs.
“Usually, they are told they are replaced by AI tools,” Inger said, adding: “People are willing to say to 1,099 people.”
Copywriting, graphic design and video editing have become the first to change, and now the labor transfer has begun to enter full-time power, according to Inge. Inger said transparency is the best policy, but that may not be enough. She pointed Rebound That language learning company Duolingo Facing CEO Luis von Ahn’s announcement of plans to phase out contractors earlier this year, and then was forced to back off some comments.
“After the huge opposition facing Duolingo, companies dare not say that this is what they are doing. People will be angry about AI replacement jobs,” Inge said.
Currently, if some signs of softening are shown in the first half of the year, the job market is reliable. The U.S. unemployment rate fell to 4.1% in June 2025, according to Trade Economicssignal widespread labor market stability. However, with general agreement, the speed of AI linking will accelerate over time. According to the World Economic Forum Work Report for 202541% of global employers intend to reduce their workforce over the next five years due to AI automation. Dario Amodei, CEO of Humanity Erase up to half of entry-level officer jobs.
There will be a turning point in the future where companies will become more transparent, but by then the role of AI in the labor market will be obvious.
“That’s when it’s OK,” Inger said. “Unemployment will be very large because individuals are adaptable, the only thing we can do.”
