If you follow the business world, you’ve heard the drumbeat. Scarcely a week goes by without a major tech company—be it Google, Amazon, Meta, or Microsoft—announcing a new round of “restructuring.” Thousands of jobs are cut, and amidst the corporate-speak about “streamlining” and “finding efficiencies,” a new two-letter buzzword has taken center stage: AI.
The official narrative is compelling. We’re told that new generative AI tools are so powerful, so efficient, that the company can suddenly achieve more with fewer people. Roles in customer service, HR, recruiting, and even entry-level coding are being automated. The layoffs, therefore, are not a failure of management, but an inevitable, futuristic step in technological progress.
There’s just one problem: it’s mostly a convenient fiction.
The “Efficiency” Argument
Let’s be clear: AI is a powerful tool for efficiency. There’s no denying it. Generative AI can write code, summarize documents, handle customer service queries, and analyze data at a speed humans can’t match. It’s a spreadsheet on steroids.
Companies are absolutely using these tools to automate repetitive tasks, and in some cases, this does lead to job redundancy. A company that can suddenly automate 30% of its customer support tickets may indeed decide it needs fewer support agents. This part is true.
But these tools are just that: tools. They are augmentations, not replacements. They are productivity enhancers, not autonomous colleagues. And that brings us to the giant gap in the “AI did it” narrative.
We Are Decades Away from AGI
The type of AI that could actually run large parts of a company, make strategic decisions, manage complex human-centered projects, or innovate in a truly novel way is known as Artificial General Intelligence (AGI). This is the “thinking” AI of science fiction—a system with the cognitive flexibility and consciousness of a human.
Ask any serious AI researcher, and they’ll tell you the same thing: we are decades away from AGI, if it’s even possible at all.
Today’s AI, including impressive models like ChatGPT and Claude, is not AGI. It’s a highly sophisticated pattern-matching system. It’s brilliant at remixing the vast library of human-generated text and images it was trained on, but it doesn’t understand concepts, have intentions, or possess a shred of “why.”
So, if the AI we have today can’t really replace the nuanced work of thousands of strategists, managers, and senior engineers, why are they getting pink slips with “AI” written on them?
The Real, and More Boring, Culprits
The truth is that “AI” has become the all-purpose corporate scapegoat. It’s a PR-friendly excuse for a set of much older, more human-driven business decisions.
The Post-Pandemic Hangover: Tech companies went on an unprecedented hiring spree from 2020 to 2022. They were flush with cash and projected that the pandemic-era digital boom would last forever. It didn’t. Now, they are correcting for that over-hiring, and “pivoting to AI” sounds a lot better than “we made a bad forecast.”
Good Old-Fashioned Cost-Cutting: With high interest rates and pressure from Wall Street, the era of “growth at all costs” is over. Investors want to see profits and lean operations. Laying off 5% of your workforce is a surefire way to cut expenses and boost your stock price in the short term. It’s a classic, cynical Wall Street maneuver, now dressed in a futuristic AI costume.
The AI Gold Rush: Ironically, companies aren’t just firing people because of AI; they’re firing people for AI. They are cutting costs in legacy departments (like HR, marketing, or older product divisions) so they can free up billions of dollars to pour into the new AI arms race. They need that capital to hire hyper-expensive AI researchers and buy massive quantities of processing power to compete.
A Resource for Those Affected
It’s precisely because these layoffs are driven by human decisions, not inevitable technology, that the impact feels so personal and difficult. It’s why I created Layoff.Pro—a resource dedicated to helping people who have been affected by these cuts. The site aims to provide support and resources, and I will be adding more in the coming weeks to help navigate this challenging landscape.
AI isn’t the executioner. It’s the excuse. It’s a convenient, forward-looking narrative that absolves executives of the responsibility for classic (and sometimes poor) business strategy. Blaming a nebulous technology feels inevitable; blaming a CEO’s decision to over-hire feels personal.
The decision to lay someone off is, and always will be, a human one. AI is just the tool. The hand wielding it is still motivated by profits, strategy, and stock prices—just as it always has been.