Are US Companies ‘AI-Washing’ Job Cuts? Experts Say the Reality Is More Complex

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In recent years, artificial intelligence (AI) has emerged as one of the most transformative technologies in the corporate world. From automating routine tasks to improving efficiency, AI is reshaping how businesses operate. However, a growing number of economists and technology analysts are questioning whether companies are overstating AI’s role in workforce reductions. The term “AI-washing” has been increasingly used to describe situations where corporations attribute layoffs to artificial intelligence even when other factors may be more responsible.

Over the past year, several major US corporations have justified job cuts by claiming that AI has made certain roles redundant. Corporate leaders often present these decisions as part of a broader strategy to modernize operations and remain competitive in a rapidly evolving technological landscape. Yet experts argue that the reality behind these layoffs is far more complicated.

Fabian Stephany, a research lecturer at the Oxford Internet Institute, suggests that linking layoffs to AI can help companies portray themselves as technological pioneers. By stating that they are integrating cutting-edge technology into their processes, firms can frame workforce reductions as necessary for innovation rather than as purely financial decisions.

Data appears to support the prominence of AI in layoff narratives. According to a December report by consulting firm Challenger, Gray & Christmas, more than 54,000 layoffs in 2025 were attributed to artificial intelligence. In January alone, Amazon cut approximately 16,000 jobs following an earlier reduction of 14,000 positions in October. Beth Galetti, Amazon’s senior vice-president of people experience and technology, described AI as “the most transformative technology we’ve seen since the internet,” emphasizing the need for a leaner organizational structure.

Similarly, Hewlett-Packard CEO Enrique Lores indicated that AI-driven productivity improvements could lead to the elimination of about 6,000 roles in the coming years. Duolingo CEO Luis von Ahn also announced plans to gradually stop using contractors for tasks that AI could handle.

Despite these claims, many analysts believe financial motivations remain the primary driver of layoffs. A January report from market research firm Forrester predicts that only about 6% of US jobs will be automated by 2030—a figure that challenges the notion of widespread, immediate AI displacement.

JP Gownder, a vice-president and principal analyst at Forrester, cautions that replacing workers with AI is neither simple nor quick. Companies that rush into layoffs without fully developed AI systems risk operational disruptions. “If you do not have a mature AI application ready to do the job, it could take 18 to 24 months to replace that person with AI—if it even works,” he explained.

Moreover, other economic pressures may be playing a larger role than companies admit. Tariffs, for example, were cited as the reason for fewer than 8,000 layoffs, a fraction compared to those blamed on AI. Martha Gimbel, executive director of the Budget Lab at Yale University, finds this imbalance implausible. She points out that technological change typically takes time to reshape labor markets, and immediate workforce adjustments are rare.

Political considerations may also influence corporate messaging. Some companies appear reluctant to criticize government economic policies for fear of potential backlash. By attributing layoffs to technological efficiency rather than policy impacts, businesses may avoid political controversy.

Another overlooked factor is pandemic-era overhiring. During COVID-19, low interest rates and intense competition for talent prompted many companies to expand rapidly. As economic conditions normalized, these firms found themselves with larger workforces than necessary. Analysts argue that today’s layoffs may reflect a correction rather than a technological revolution.

Still, not all AI-related job cuts are questionable. Salesforce CEO Marc Benioff stated that the company reduced its customer support staff from 9,000 to 5,000 after adopting AI agents. Experts consider this explanation plausible because customer service tasks closely align with capabilities already demonstrated by modern AI systems.

However, researchers warn against relying solely on CEO statements to understand labor market changes. Corporate leaders have incentives to present decisions in ways that reassure investors and enhance company reputation. This does not necessarily mean they are misleading the public, but it highlights the need for independent analysis.

Interestingly, some executives have softened earlier claims linking layoffs directly to AI. Amazon CEO Andy Jassy later clarified that recent job cuts were “not really financially driven, and it’s not even really AI-driven… It really is culture.” Likewise, Duolingo clarified that it had not laid off full-time employees and that contractor numbers naturally fluctuate based on business needs.

Firsthand accounts from affected workers further complicate the narrative. One former Amazon principal program manager, who described herself as a heavy user of AI tools, believes her termination was less about automation and more about cost savings. She suspects her responsibilities were reassigned to a more junior, lower-paid employee rather than replaced by technology.

Her conclusion is stark: “I was laid off to save the cost of human labor.”

The debate surrounding AI and employment is unlikely to fade anytime soon. While artificial intelligence will undoubtedly reshape the future of work, experts stress that its impact is gradual rather than instantaneous. For now, layoffs attributed solely to AI may sometimes reflect broader economic adjustments, strategic restructuring, or profit-driven decisions.

Ultimately, understanding the true causes of job cuts requires looking beyond corporate headlines. As AI continues to evolve, distinguishing between genuine technological disruption and convenient corporate narratives will be essential for workers, policymakers, and investors alike.