Big layoffs are coming because of AI… or NOT!
Over the past few weeks, we’ve seen tech companies like Autodesk (~1000 roles), Microsoft (~9000 roles), Amazon (~16,000 roles), Salesforce (~1000 roles), Workday (~400 roles), and Meta (~1500 roles),… all announcing layoffs. And almost all of them shared a similar reason: “It’s because of AI.”
But… is it really AI?
Without a doubt, AI is changing work. But I think the real reason AI shows up in the headline is that it’s an easy story to tell publicly. It sounds strategic and helps companies look cool and future-focused in their shareholders’ eyes.
And this isn’t just a guess. Being in the Bay Area, we often talk with founders, executives, and employees going through this firsthand. Across those conversations, we observe the same pattern that most layoffs are mainly due to:
- Cost + margin pressure: higher expectations for profitability and efficiency.
- Geography: shifting work offshore/nearshore and expanding vendors due to the hiring constraints in the U.S., while also lowering operational costs.
- Pandemic correction: undoing over-hiring from the growth-at-all-costs era.
- Speed: delayering management to move faster and keep pace with competitors.
- AI (sometimes): workflow substitution in specific tasks, rather than “entire teams disappear overnight”.
Why is this distinction important?
Let’s imagine an employee in your organization reading those headlines, seeing AI as the main reason for layoffs. A very reasonable thought is: If I use these tools, there’s a good chance I’ll be replaced, just like everyone else. And if that’s the belief, the “rational” response becomes: ignore the tools, push back on the rollout, or sabotage the initiative.
This matters because if we don’t understand what’s actually causing resistance to AI adoption inside the organization, we’ll address the wrong problem, our employees won’t adopt the tools, and we won’t get the expected ROI.
This is exactly the type of conversation we’ll be having at our AI Summit in April: “how do we lead AI initiatives strategically, addressing the right problems and creating new opportunities?”
