Are There Any Job Cuts Tech CEOs Won’t Blame on AI?
Executives say artificial intelligence is causing massive layoffs. The reality is more complicated.
Tech layoffs are everywhere, with CEOs announcing that hundreds or thousands of jobs must be jettisoned. The given cause is always the same: artificial intelligence. The technology is reshaping the world, we are told, and just as the automobile sent the horse and buggy to the dustbin, so AI is doing to tech workers.
Media outlets dutifully take these titans of industry at face value. “AI will affect more than half of all U.S. jobs, analysis finds,” CBS News alleged. “Report: Losing your job to AI doesn’t just lead to unemployment, it leaves lasting scars,” announced CNN. “America Isn’t Ready for What AI Will Do to Jobs,” The Atlantic, who has a “strategic content and product partnership” with OpenAI, reported in February. “The scientist who helped create AI says it’s only ‘a matter of time’ before every single job is wiped out—even safer trade jobs like plumbing,” Fortune declared apocalyptically last month.
All of these headlines build on the same narrative: sorry, but artificial intelligence is coming for your job, and innovative tech companies are desperately trying to stay one step ahead of it.
But is that really what’s happening? No, or at least, not yet. It’s impossible to square these bold prognostications with the current state of AI—and the data on what it’s doing to and for workers.
To understand why, let’s look at Block, a Jack Dorsey-founded payment app and music streaming service. Dorsey recently announced the company would be laying off 4,000 employees—40% of its total headcount—in response to forthcoming sea changes caused by AI. As he told Wired: “The most important thing for me and the company is that we stay well ahead of the technology trends… These tools are presenting a future that entirely changes how a company is structured. … I want to make sure we can be proactive about those moves, instead of reacting.”
It’s a curious move for a company that just six months prior had included those same employees in a three-day company party at the Oakland Coliseum costing $60 million.
And where Dorsey pointed to AI’s radical threat, those tracking the company saw an alternative justification: the need to correct pandemic-inspired overhiring. Block ended 2019 with about 4,000 employees, the same number it just announced it would be laying off. But by 2023, that number had ballooned to 13,000 as the company expanded its remit beyond payment processing to music streaming, cryptocurrency, and pay-as-you-go loans.
Layoffs aren’t new for Block. After undergoing a 1% headcount reduction in October 2023, it announced another 8% reduction in November to address “redundancy.” “The growth of our company has far outpaced the growth of our business and revenue,” Dorsey wrote to his team. He wanted to take the company back to its startup roots. Last year, Block slashed another 8% of its workforce, with Dorsey explicitly saying that none of the changes were aimed at “replacing folks with AI.” Instead, he explained, the company would be “raising the bar and acting faster on performance.”
Then something changed—not the job cuts, but the justification. In a note about the new layoffs in February 2026, which helpfully declared “we are not in trouble,” Dorsey finally fingered AI as the culprit: “the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company. and [sic] that’s accelerating rapidly.”
The former head of communication at Square, which eventually became Block, quickly took to the pages of the New York Times to suggest that, rather than driven by new technology, AI was “just a convenient and flashy new cover for typical corporate downsizing.”
He might have been on to something. Beyond Block, a wave of tech companies are axing thousands of staff and pointing at AI.
Before a recent data breach, Salesforce CEO Marc Benioff said that the 4,000 employees reportedly laid off last year were actually part of a “planned redeployment” in response to AI. Last month, Dell Technologies quietly gave walking papers to over 11,000 staff, also blaming AI. In January, Amazon cut bait with 16,000 workers, citing the need to support AI changes. Citigroup’s CEO announced the company would be slashing thousands of jobs to focus on “how we can use AI tools and automation to further innovate, re-engineer, and simplify our processes.”
Software giant Atlassian instituted a 10% headcount cut in March; like Block, this wasn’t an admission of defeat. The company declared (emphasis theirs): “We are choosing to adapt.” Then there’s the case of Crypto.com, who announced a third round of cuts in four years—this time to 12% of its workforce. Sure, the crypto industry is in free fall, but this set of layoffs is really caused by “this critical point where we have to find ways to lean into and leverage all the new tooling and platforms and technologies that have become available.” In other words: AI.
And yet, job postings for software developers—long expected to be an early AI casualty—are up 15% this year. The Bureau of Labor Statistics projects a 7% increase in allegedly vulnerable market research jobs between now and 2034. Despite accelerating chatbot technology, customer support jobs that could conceivably be cut are growing, too.
And most CEOs see these trends continuing. Eric Levitz at Vox explains:
What’s more, there are few indications that mass, white-collar layoffs are on the horizon. In a December survey by the accounting firm KPMG, 92 percent of CEOs said they were planning to grow their head counts, even as 69 percent were dedicating a large share of their budgets to AI deployment.
Similarly, a January survey from EY-Parthenon found that 69 percent of CEOs expected that AI would lead them to either maintain or expand their payrolls.
That seems reasonable when considering that, by all accounts, AI is not ready to actually replace the workers who have been let go. New MIT research suggests that even when it comes to text-based tasks that AI could theoretically swallow up, competency from the machines is years away.
Instead, AI is increasingly reshaping—not replacing—today’s jobs. As a recent New York Times piece explains:
It is vastly accelerating many of the tasks conducted by white-collar workers, and even replacing some of these tasks altogether. What it can’t automate — at least not yet — are the hard-coded requirements of bureaucracy.
With the help of A.I., white-collar workers can generate far more memos or strategy options than in the past and churn out more product prototypes or software features. But some executive still has to decide which option to greenlight. Workers can gin up many more sales pitches, but they still have to persuade clients to sign on the dotted line.
This also helps explain a countervailing AI phenomenon: that the tool often leads to additional hiring in order to navigate and implement it. Vanguard was among those who found that in the industries most exposed to AI, wage and job growth actually increased over the last two years. Rather than the destruction predicted in breathless headlines, workers are often made more productive by AI rather than obsolete.
So what’s going on here? Why the CEO claims to the contrary?
There’s another, less flashy explanation for these cuts: inflated headcounts. During the pandemic, each of these corporations massively expanded their payrolls.
Salesforce’s 2019 head count stood at 35,000—far less than the 86,000-plus workers the company employed before its latest layoffs. Dell’s total ballooned to nearly 170,000 during lockdowns before falling to just over 130,000 in the following years. Amazon’s headcount surged by nearly 500,000 during COVID-19, before being trimmed in its recent cuts. Citigroup’s employee total swelled from 200,000 to approximately 239,000 by 2022. Atlassian’s headcount of a little over 3,600 spiked to nearly 16,000 before they announced layoffs. In short, bloated tech companies have been an ill-kept industry secret.
Block’s experience highlights why the cloak of AI is valuable when it comes to announcing these PR-unfriendly headcount reductions. While organizational layoffs can spook investors and the general public into thinking that perhaps a company isn’t doing so well, AI layoffs are billed as a dynamic response to forces far beyond the CEOs control. Block’s stock surged 20% on the February news that it was laying off nearly half of its staff. Dynamically adjusting to new technologies is the market of an executive in control, allegedly, even if they’re really papering over past mistakes. It’s a new page in a rather dated playbook.
Where AI is actually replacing humans, early results aren’t encouraging. Salesforce’s transition from human customer support to AI-powered agents was so successful that, mere months later, it started rehiring the displaced workers. Money management app Klarna had a similar experience after laying off thousands of employees as part of a shift to AI.
‘So what?’ you might be wondering. Does it really matter if these firms are smudging the facts for the sake of their stock price?
Yes. For one, it’s a flagrant abuse of the public trust—particularly around a technology that these same business leaders are telling us will change everything about life, and which states and the federal government are trying to figure out how (and how much) to regulate. Young people preparing for the workforce are anxiety-ridden about this development across industries—a fear no-doubt inflated by bogus claims.
Lying to investors is not only a crime but inflames the broader financialization crisis in our economy, propping up valuations and stocks without merit. As Oren Cass recently argued in the New York Times:
Financialization has made American businesses less resilient, less innovative and less competitive. It has been a major cause of slow wage growth and rising inequality. It has fueled the loss of manufacturing jobs across the heartland. It has corrupted sectors in which the profit motive was never meant to reign supreme — veterinary practices, funeral parlors, campgrounds, residential treatment services, youth sports, hospitals and nursing homes, even suppliers for volunteer fire departments — consolidating and managing them with ruthless efficiency, squeezing their vulnerable customers and then pointing to the higher cash flow as “value creation.”
The narrative that robots are already coming for your job may make for a compelling media headline and a convenient excuse to ax employees. But when businesses deceptively pinpoint this phenomenon as the cause for hiring corrections, it undermines the long-term health of the employment pipeline and furthers the disconnect between the stock market and reality.
The tech industry is already underwater with the public when it comes to trust in AI, and Americans are increasingly worried the technology will do more harm than good to them as individuals and to the country more broadly. If industry leaders hope to turn that around—particularly amid public blowback to the massive data centers that AI will require—executives should explain how and why it’s valuable as something more than a scapegoat for largely unrelated corporate downsizing.