AI Changes How CEOs Talk About Layoffs

Corporate leaders are becoming more cautious about connecting artificial intelligence directly to job cuts.

Earlier, some executives openly highlighted AI's potential to reduce the number of workers needed. Klarna said in 2024 that its AI assistant was performing work equivalent to that of 700 full-time agents. Salesforce CEO Marc Benioff also said AI had helped reduce the company's support workforce from about 9,000 employees to around 5,000. Coinbase later cut roughly 700 jobs while pursuing smaller teams built around AI.

The language surrounding these changes is now becoming more careful as concerns about AI's effect on employment grow. A CBS News and YouGov poll found that 61% of U.S. adults believe AI will eventually reduce economic opportunities for most people, compared with 21% who expect it to create more opportunities. A separate Pew survey found that 73% of Americans under 30 expect AI to result in fewer jobs over the next two decades.

AI was also the most frequently cited reason for U.S. job cuts in July for the fifth month in a row, according to Challenger, Gray & Christmas. Employers have attributed nearly 113,000 announced layoffs this year to AI, representing about 24% of all announced cuts.

As a result, companies are increasingly separating workforce reductions from the broader adoption of AI. Etsy said its recent 220 job cuts were not caused by AI, although the company acknowledged that the technology is changing the skills and capabilities it needs. Patreon similarly said its workforce reduction was not based on the idea that AI could replace people, while noting that AI had significantly changed how the company operates. Microsoft also said thousands of eliminated roles were not being replaced by AI, even as the technology changes the nature of work.

Communications experts say employers need to explain workplace changes before announcing layoffs, giving employees time to understand how roles and skills may evolve. They also advise companies against presenting job cuts as an AI success story and stress the importance of maintaining a consistent explanation for employees, investors and the public.

The growing use of AI has not changed the basic principles of communicating layoffs, but it has increased the reputational risks companies face when explaining why jobs are being eliminated.