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Companies Are Laying Off Workers Because of AI’s Potential—Not Its Performance
AI has been cited as a cause of layoffs, but is it actually displacing jobs? And if not, what’s going on? Based on a survey of 1,006 global executives in December 2025, AI is behind at least some layoffs, but that these are almost completely in anticipation of AI’s impact. In other words, the job losses and slowed hiring are real, even though companies are still waiting for generative AI to deliver on its promises. This strategy of focusing on short-term gains based on long-term hopes has costs. It can sour employees on AI, foster cynicism, and even lead to having to rehire in embarrassing retreats. Instead, companies should focus on enterprise applications of generative AI, be incremental about any AI-related layoffs, start a business process redesign effort, and make the positive impact of AI clear.
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