‘AI-washing’ and ‘forever layoffs’: Why companies keep cutting jobs, even amid rising profits

In many industries, AI is far from delivering on its promises of massive productivity gains that make humans obsolete. But one thing is clear: The technology is absolutely terrifying workers. A survey of nearly 5,000 Americans this summer found that 71% of them are worried that artificial intelligence will put too many people out of work permanently. Those concerns reflect what companies are saying: About 40% of employers expect to cut their workforces in response to AI automating tasks. 

But the reality is a bit more complicated. Companies are citing AI in some layoffs, but the looming AI jobspocalypse doesn’t seem to be here yet. 

Of the 1.2 million job cuts U.S. companies announced in 2025—yes, nearly twice 2024’s total—AI was mentioned as a reason for just 55,000, or 4.5%, of them, according to research firm Challenger, Gray & Christmas. And in some cases the connection to AI might be exaggerated: Companies may make vague gestures toward the rise of AI as a way to justify layoffs undertaken for other ...