Companies Blame AI for Job Cuts—Critics Say It’s a ‘Good Excuse’

TL;DR: Major corporations across tech, consulting, and aviation are cutting thousands of jobs citing AI efficiency gains, but Oxford researchers argue firms are using AI as a convenient scapegoat to mask pandemic-era overhiring corrections and broader business challenges. US labour data shows minimal AI-driven disruption despite the headlines.

The AI Layoff Wave

From tech giants to airlines, global companies have accelerated workforce reductions with a consistent explanation: artificial intelligence is making human workers redundant.

Recent examples paint a stark picture:

  • Accenture announced restructuring plans prioritising quick exits for workers unable to reskill on AI
  • Lufthansa will eliminate 4,000 jobs by 2030 to leverage AI efficiency gains
  • Salesforce cut 4,000 customer support roles, claiming AI handles 50% of the workload
  • Klarna reduced staff by 40% through aggressive AI adoption
  • Duolingo shifted from contractors to AI-powered content generation

The headlines suggest an automation crisis—but academics question whether the narrative matches reality.

The Scapegoating Hypothesis

Fabian Stephany, assistant professor of AI and work at Oxford Internet Institute, offers a more cynical interpretation: companies are positioning AI as a strategic excuse rather than the true driver of cuts.

“I’m really sceptical whether the layoffs that we see currently are really due to true efficiency gains,” Stephany told CNBC. “It’s rather really a projection into AI in the sense of ‘We can use AI to make good excuses.’”

His argument centres on two key points:

  1. Positioning advantage: Firms can appear innovative and technologically advanced whilst masking uncomfortable business realities
  2. Pandemic correction: Companies that “significantly overhired” during Covid-19 are now conducting “market clearance” under the AI banner

“Instead of saying ‘we miscalculated this two, three years ago,’ they can now come to the scapegoating, and that is saying ‘it’s because of AI though,’” Stephany explained.

This pattern hasn’t gone unnoticed. Jean-Christophe Bouglé, co-founder of Authentic.ly, wrote in a widely-shared LinkedIn post that AI adoption proceeds at a “much slower pace” than corporate announcements suggest, with many projects being rolled back due to cost or security concerns.

The Data Tells a Different Story

Contrary to the corporate messaging, US labour market data reveals minimal AI-driven disruption:

Yale University Budget Lab analysis (November 2022 to July 2025):

  • Examined workforce composition changes since ChatGPT’s release
  • Found no evidence of widespread AI-driven job displacement
  • Occupational mix shifts remain modest compared to previous technology introductions

New York Federal Reserve research (September 2025):

  • 40% of service firms now use AI (up from 25% in 2024)
  • Manufacturing AI adoption jumped from 16% to 26%
  • Only 1% of service firms attributed layoffs to AI in 2025 (down from 10% in 2024)
  • 35% of service firms used AI to retrain employees
  • 11% hired more workers due to AI implementation

“Economists call this structural unemployment, so the pie of work is not big enough for everybody anymore and so people will lose jobs definitely because of AI,” Stephany noted. “I don’t think that this is happening on a mass scale.”

Corporate Responses

When pressed on the AI justification, companies offered varying explanations:

Salesforce clarified that its Agentforce AI agent reduced support case volume, eliminating the need to “backfill support engineer roles” whilst successfully redeploying “hundreds of employees into other areas like professional services, sales, and customer success.”

Klarna CEO Sebastian Siemiatkowski explained on X that workforce reduction from 5,500 to 3,000 involved multiple factors beyond AI, including analytics team consolidation and natural attrition. He emphasised the company has made “0 layoffs due to AI” but virtually stopped hiring since 2023, “largely due to AI.”

Lufthansa and Accenture declined to comment or provide additional details on their AI restructuring strategies.

The Employee Impact

The disconnect between corporate messaging and employment data doesn’t ease worker anxiety.

Jasmine Escalera, a careers expert, warned that public AI-layoff announcements are “feeding the fear of AI” amongst employees already concerned about job security.

“Companies are not being honest, open and communicative about how they’re implementing AI,” Escalera told CNBC Make It. “Now companies are openly stating ‘We’re doing this [layoffs] because of AI’ so it’s feeding the frenzy.”

She argued that major corporations need to demonstrate more responsibility given their influence on broader business norms and employment practices.

Historical Patterns

Stephany placed current AI concerns within a longer historical context of technology-displacement fears that never materialised at predicted scales.

“It reoccurred this century alone a dozen times, you can go back to ancient times where Roman emperors put hold to certain machines because they were worried about this and always the contrary happened,” he explained.

“The machine made companies, industries more productive. It allowed for the emergence of entirely new jobs. If you think about the internet 20 years ago, nobody would have known what a social media influencer is, what an app developer is because it didn’t exist.”

Looking Forward

The tension between corporate AI narratives and employment data suggests a more complex reality than mass automation headlines imply. Whilst AI undoubtedly transforms specific roles and workflows, evidence of widespread structural unemployment remains absent.

The more pressing question may be organisational honesty: are companies genuinely navigating unprecedented technological disruption, or strategically deploying AI rhetoric to justify difficult business decisions rooted in earlier strategic miscalculations?

For employees navigating this uncertainty, the distinction matters profoundly—not just for current job security, but for understanding what skills and adaptations will genuinely protect future employability versus which fears are manufactured by corporate communication strategies.

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