'Implausible': Economist says technology too new to have such an impact on jobs
US companies are increasingly citing artificial intelligence (AI) as a reason for job cuts, but economists and technology analysts say many of those layoffs are more likely driven by tariffs, pandemic‑era over‑hiring and efforts to boost profits, according to a report.
A December report from outplacement firm Challenger, Gray & Christmas found that AI was cited as a factor in more than 54,000 US layoffs in 2025, noted The Guardian. By contrast, tariffs were blamed for fewer than 8,000 job losses over the same period, the publication reported.
Economists quoted by The Guardian say that disparity is difficult to reconcile with the relatively short time AI has been in wide commercial use.
“Most economists would tell you that that was implausible,” said Martha Gimbel, executive director and co‑founder of the Budget Lab at Yale University. “ChatGPT was only released three years ago … It is not the case that a new technology develops and the workforce adjusts immediately. That is just not how it works.”
Recently, IgniteTech chief executive Eric Vaughan defended a decision to replace nearly 80% of his workforce after a company‑wide push to adopt AI met stiff resistance, calling the shift essential to the firm’s survival.
AI cited in major corporate layoffs
Several large US employers have explicitly linked headcount reductions to AI adoption, The Guardian reported.
Amazon cut 14,000 jobs in October and a further 16,000 in January. In an October memo, Beth Galetti, senior vice‑president of people experience and technology at Amazon, wrote that “AI is the most transformative technology we’ve seen since the internet, and it’s enabling companies to innovate much faster than ever before,” adding: “We’re convinced that we need to be organized more leanly.”
Hewlett‑Packard CEO Enrique Lores told investors in a November earnings call that the company would use AI to “improve customer satisfaction and boost productivity”, saying this could allow HP to cut 6,000 positions “in the next years”, according to The Guardian.
In April, Duolingo CEO Luis von Ahn said the language‑learning company would “gradually stop using contractors to do work that AI can handle”, signalling a shift of certain tasks from people to technology.
Companies such as HP, Meta, Amazon, and Microsoft have started laying off workers amid the rise of AI.
Analysts play down scale of AI’s current impact
Despite these announcements, analysts say AI is, for now, a limited rather than dominant driver of overall job losses. A January report from market research firm Forrester, cited by The Guardian, projects that only 6% of US jobs will be automated by 2030.
JP Gownder, a Forrester vice‑president and principal analyst, told The Guardian that some companies may be moving too quickly in assuming AI can replace large numbers of staff. “A lot of companies are making a big mistake because their CEO, who isn’t very deep into the weeds of AI, is saying, ‘Well, let’s go ahead and lay off 20 to 30% of our employees and we will backfill them with AI,’” he said. Without mature, deployed applications ready to handle that work, he warned, it could take 18 to 24 months to replace a person “if it even works”.
Fabian Stephany, a departmental research lecturer at the Oxford Internet Institute, told The Guardian that AI can be used as a convenient rationale for cuts made for more conventional reasons. He said executives can position themselves as technological frontrunners by saying they are integrating the newest systems and therefore “have to let go of these people”.
Economists interviewed by The Guardian also said that in specific functions, AI‑linked reductions do appear credible. Salesforce CEO Marc Benioff said he reduced the company’s customer staff from 9,000 to 5,000 because it now uses AI agents, stating: “I need less heads.” Stephany described that example as plausible, noting that online and customer‑support tasks are relatively close to what current AI systems can perform.
Tariffs, politics and pandemic over‑hiring
The Challenger data also show that tariffs accounted for a far smaller share of disclosed job cuts than AI, even though trade policy has hit some sectors. Gimbel told The Guardian that some firms may be reluctant to attribute layoffs to tariff‑related costs because of concerns about political consequences. By crediting cuts to efficiencies from AI, companies may avoid direct conflict with policymakers.
Gownder pointed to over‑hiring during the Covid‑19 pandemic as another major factor. He said surging recruitment was fuelled by low interest rates, intense competition for talent and other conditions that are no longer in place. For HR teams, acknowledging the role of earlier expansion and shifting macroeconomic conditions is important for drawing lessons that inform future hiring and restructuring decisions.
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