The AI Jobspocalypse: Why Companies Keep Cutting Jobs

The future of work is uncertain, and AI is not the only job killer.

TL;DR
• Companies are cutting jobs despite rising profits, citing AI as a reason.
• The connection between AI and layoffs is often exaggerated.
• Workers are fearful of an AI job wipeout that hasn’t yet happened.

Summary
The recent trend of layoffs in companies, despite rising profits, has sparked concerns among workers about the impact of artificial intelligence (AI) on job security. A survey of nearly 5,000 Americans found that 71% are worried that AI will lead to permanent job losses. However, the reality is more complex, with companies citing AI as a reason for only 4.5% of 1.2 million job cuts in 2025. Some companies, like ASML and Amazon, have announced significant layoffs, but these appear to be driven more by efforts to streamline operations and boost profitability than by AI automation.

Key takeaways from the current job market include:
• Companies are cutting jobs despite reporting healthy growth and profits.
• AI is being cited as a reason for layoffs, but its impact may be exaggerated or premature.
• The 'forever layoff' trend, where companies implement repeated rounds of layoffs, is contributing to worker unease.
• Worker morale is suffering due to the uncertainty and repeated layoffs, even at profitable companies.
• The distinction between AI-driven layoffs and those driven by other factors, such as corporate bloat, is becoming increasingly blurred.

The impact of layoffs on worker morale and engagement is significant, with research suggesting that repeated layoffs can have a compounding negative effect on employees. As companies navigate the changing job market, they must balance the need to adapt to technological advancements with the need to maintain a stable and motivated workforce.

The future of work is uncertain, and it's time for companies to rethink their approach to layoffs.