Key Takeaways
- AI-related job cuts have surpassed 50,000 in the US alone in 2025, according to consulting firm Challenger, Gray & Christmas.
- Companies such as Amazon, Microsoft, Salesforce, and IBM have explicitly cited AI as a reason for restructuring and job cuts.
- Experts debate whether AI is the primary reason for these layoffs or if it’s being used as an excuse for downsizing.
- AI is being used as a cost-cutting tool to deal with inflation, high tariffs, and pressure to improve profitability.
- A recent MIT study suggests that AI can handle 11.7% of US jobs and could save companies $1.2 trillion in wages.
Introduction to AI-Related Job Cuts
The increasing use of artificial intelligence (AI) in various industries has led to a significant number of job cuts in the US. According to consulting firm Challenger, Gray & Christmas, AI-related job cuts have surpassed 50,000 in 2025 alone. This trend is expected to continue as companies seek to cut costs and improve profitability. The use of AI as a cost-cutting tool is being driven by inflation, high tariffs, and the need to stay competitive in the market. While some experts argue that AI is the primary reason for these layoffs, others believe that it’s being used as an excuse for downsizing.
The Role of AI in Job Cuts
A recent study by the Massachusetts Institute of Technology (MIT) found that AI can handle 11.7% of US jobs and could save companies $1.2 trillion in wages across finance, healthcare, and professional services. This has led to a significant number of job cuts in these industries, with companies citing AI as a reason for restructuring. However, some experts question whether AI is the real reason for these layoffs. Fabian Stephany, assistant professor of AI and work at the Oxford Internet Institute, believes that many companies overhired during the pandemic and may now be using AI as a convenient excuse for downsizing.
Big Tech Companies and AI-Related Job Cuts
Several big tech companies, including Amazon, Microsoft, Salesforce, and IBM, have explicitly cited AI as a reason for job cuts. Amazon, for example, laid off 14,000 corporate employees, citing the need to be organized more leanly and to move quickly to innovate. Microsoft conducted at least four major rounds of workforce reduction, cutting around 15,000 jobs, and instructed managers to use AI usage as part of their holistic reflections on an individual’s performance and impact. Salesforce cut 4,000 customer support roles with the help of AI automation, while IBM replaced several hundred HR roles with AI chatbots.
The Impact of AI on Workforce Reduction
The use of AI in workforce reduction is being driven by the need to cut costs and improve profitability. Companies are using AI to automate tasks, streamline processes, and reduce the need for human labor. While this may lead to short-term cost savings, it’s likely to have a significant impact on the workforce in the long term. The MIT study found that AI could save companies $1.2 trillion in wages, but it’s unclear how this will affect the broader economy and society. As AI continues to be used as a cost-cutting tool, it’s likely that we’ll see more job cuts in the future.
The Future of Work in an AI-Driven Economy
The increasing use of AI in various industries is likely to have a significant impact on the future of work. As AI takes over routine and repetitive tasks, there will be a need for workers to develop new skills and adapt to new roles. Companies such as IBM are hiring in areas that require deeper critical thinking, such as engineering, sales, and marketing. However, it’s unclear how many workers will be able to make this transition, and what will happen to those who are unable to adapt. As AI continues to drive workforce reduction, it’s likely that we’ll see a significant shift in the nature of work and the economy.
