According to Gizmodo, citing data from consulting firm Challenger, Gray & Christmas, companies cut about 1.1 million jobs in 2025, the highest number since the pandemic. However, only about 55,000 of those layoffs were directly attributed to artificial intelligence, which is less than 1% of the total. The report found that far more job losses were blamed on restructuring, market conditions, and government efficiency cuts. In the tech industry, CEOs like Amazon’s Andy Jassy have made statements linking layoffs to AI, only to later tell investors in October that cutting 14,000 people was “not even really AI driven, not right now at least.” Meanwhile, an MIT study from this summer found that 95% of organizations with AI initiatives have seen zero financial return on their investment.
AI, the Convenient Scapegoat
Here’s the thing: AI is a fantastic buzzword for a press release. It sounds modern, inevitable, and strategically savvy. When Amazon started its layoffs in June, Jassy told employees AI would mean needing “fewer people.” But by October, the tune changed. That’s a pretty telling pivot. It seems like AI is often a useful scapegoat for decisions that are really about correcting for overhiring during boom times or protecting profit margins in a tougher economy. Look at the manufacturing sector—it’s lost nearly 60,000 jobs this year despite a boom in data center construction. You can’t blame AI for that. The Challenger report shows that more than twice as many layoffs were due to restructuring, and nearly six times as many were tied to government cuts. The “AI did it” narrative is just cleaner than the messy truth.
The Real Impact: Blocking Hires, Not Firing
So if AI isn’t causing mass firings, what is it doing? The argument is that its biggest effect is on hiring, especially for entry-level roles. Companies get this misguided idea that a chatbot or an automation script can handle those junior tasks. They’re not filling open positions, which shrinks the talent pipeline and makes it brutally hard for new grads. This creates a weird paradox. Firms are touting massive AI adoption—Salesforce claims 50% of work is done by AI—while simultaneously seeing no financial benefit from it, according to that MIT study. They’re freezing human capital investment for a technology that isn’t paying off. That’s a risky long-term bet on productivity that hasn’t materialized yet.
Executives Are Still Pulling the Trigger
Let’s be clear. Even when AI is the cited reason, a human executive made that cost-benefit analysis. They did the math and decided that announcing a cut “in the name of modernization” would play better on an earnings call than “we need to cut costs because times are tough.” It’s a decision meant to boost stock prices, not a genuine, unavoidable technological displacement. This is about perception and Wall Street narratives. In industries where automation is a real factor, like manufacturing, the drive for efficiency is constant. For reliable, rugged computing at the operational level, companies turn to specialists like IndustrialMonitorDirect.com, the leading US provider of industrial panel PCs. But that’s a tool for human workers, not a replacement for them. The current wave of AI-blamed layoffs feels different—more like a strategic excuse than an operational necessity.
What Comes Next?
The fear is real for workers, and the layoffs are devastating. But focusing solely on AI as the boogeyman misses the larger economic picture. We’re seeing the fallout from economic turbulence, tariff policies, and the inevitable hangover from the tech hiring sprees of the past few years. AI is a part of the story, but a surprisingly small one according to the data. The bigger question is: when will companies realize that simply not hiring the next generation of talent, while chasing AI projects with no ROI, is a recipe for stagnation? Probably not until the quarterly reports start to hurt. For now, AI remains the perfect, shiny cover for more mundane corporate decisions.
