Ever since most people learned about the evolving nature of LLMs, where AI can “do what people do,” to an extent, job displacement has been fear #1, notwithstanding other concerns about SkyNet, etc. After all, your job is your source of survival in a fiercely competitive economy, and to many, it seems the threat is real.
There is another school of thought, though. For each doomsayer who envisions the complete collapse of white-collar work this year, there’s another observer who might contend that companies are already starting to hire back people as they realize the limitations of AI. Check out this piece by our own Forbes contributor, TerDawn DeBoe.
“Time reported this week on how some companies are beginning to follow a predictable model when it comes to rehiring workers after laying off those same employees due to their jobs being taken over by artificial intelligence,” DeBoe writes, chronicling a common trajectory. “The company first announces it is going to use an AI to do a job. The staff is downsized. Then six to twelve months pass and the AI has successfully managed 60% of the job duties, while unable to complete the remaining 40%, so the company hires the original staff members back.”
With that in mind, let’s look at where the layoffs are right now, and what some CEOs are thinking.
By the Numbers
I was looking at this long-form piece at Founders Reports that goes over multiple aspects of AI-driven layoffs, and how they can masquerade as cost-cutting measures.
Although smaller companies, like Cloudflare with 1,100 layoffs, and Crowdstrike with around 500, have their own impact, some of the big firms have much bigger numbers. It may not surprise you to know that, at least in the Founders Report piece, Microsoft is in the top ten with around 23,000 layoffs, you might be blown away by the number of layoffs at UPS: an estimated 32,000 workers exited the company within the past year, with many of them having to do with AI.
Write Marc Shorb explains:
“In 2025, AI accounted for 54,836 announced cuts, roughly 5% of total layoffs. Then 2026 arrived. AI appeared in 4,680 announced cuts in February. In March, the number reached a new high, and for the first time, AI became the #1 most-cited reason for workforce reductions. The number of AI layoffs peaked in May before falling in June. However, AI has been the #1 reason for job cuts for each of the past for months.”
What happens when 2027 arrives? Will we have all-AI companies?
CEOs Speak Out
NNNN also goes over actions that today’s CEOs are likely to take, including: layoffs, even more layoffs, and a freeze on entry-level hiring. All of this is likely to leave new grads out in the cold.
The piece includes some pithy quotes from top brass. Here are a few that I found interesting, starting with Accenture, where CEO Julie Sweet said the firm will “exit staff on a compressed timeline where reskilling wasn’t a viable path.” That sounds like corporate-speak, for sure. Here are more illuminating comments:
“We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs. It’s hard to know exactly where this nets out over time, but in the next few years, we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company.” – Amazon CEO Andy Jassy
“With AI and agents now core parts of our workforce, the way we work at Cloudflare has fundamentally changed.” – Cloudflare CEO Matthew Prince
“AI has always been foundational to how we operate. AI flattens our hiring curve, and helps us innovate from idea to product faster. It streamlines go-to-market, improves customer outcomes, and drives efficiencies across both the front and back office.” – Crowdstrike CEO George Kurtz
“AI is changing the world, and we must adapt by ensuring our product delivers truly great experiences for job seekers and employers.” – Indeed and Recruit Holdings CEO Hisayuki “Deko” Idekoba
The Price of Regret
When companies move too fast to fire human workers, and use AI instead, what happens?
Here’s how Pam Didner puts it at Inc.:
“Before you start cutting, how do you actually separate human judgment from tactical reasoning?” Didner asks rhetorically. “You definitely can’t tell that from an org chart. You find it in the workflows and the daily conversations with your employees.”
Didner narrates what unfolded at companies that were too quick to discard the human in the loop:
“The companies now rushing to rehire didn’t necessarily undervalue experience—they took a shortcut. They cut without ever mapping where judgment actually lived. They paid to be wrong, and then they paid again to undo it.”
Touche.
Essentially, companies have to be smart, nut just operate on a knee-jerk reaction to “get AI in.” Yes, you need to use AI, but not immediately, or across the board, or without human supervision. AI, as some of the above writers note, is a task replacer, not a human replacer. We still need to limit what we hand off to LLMs. And some companies are learning that the hard way. Stay tuned.
