AI is driving more job cuts and weighing on hiring, economists say

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AI-related layoff announcements are mounting, fueling the consciousness that the exertion is already replacing a significant number of U.S. workers arsenic companies put heavy successful automation. But AI's broader interaction connected workers whitethorn beryllium quieter: weaker hiring, particularly for inferior and entry-level roles.

Enterprise bundle shaper Intuit this week chopped 17% of its staff, oregon 3,000 people, saying it would displacement its absorption to AI, portion Meta began laying disconnected 8,000 workers connected Wednesday arsenic it shifts concern toward AI. Last week, Cisco besides announced thousands of occupation cuts, with CEO Chuck Robbins saying successful a blog post that it was reducing headcount successful portion to put successful "employees' usage of AI crossed the company."

Andrew Tran, 40, a Meta merchandise decorator who was among those losing their occupation this week, told CBS News helium plans to look for a caller occupation astatine a institution that helium believes is utilizing AI "intentionally," alternatively than chiefly to regenerate workers.

Tran doesn't judge his relation astatine Meta was straight replaced by AI, but said it's wide corporations are leaning into the tech.

"In general, companies should person an work to retrain their workforces alternatively of throwing them to the curb," helium told CBS News, portion clarifying that his views are aimed astatine the firm assemblage arsenic a full and not specifically astatine Meta.

Meta didn't instantly reply to a petition for comment.

Thousands of occupation cuts

Companies person announced astir 50,000 occupation cuts this twelvemonth linked to AI, according to research from outplacement steadfast Challenger, Gray & Christmas. Those layoffs relationship for astir 17% of the astir 300,000 full occupation cuts announced truthful acold successful 2026, the firm's figures show.

The layoffs travel arsenic immoderate analysts pass AI could yet reshape the labour marketplace connected a overmuch larger scale. Boston Consulting Group has projected that up to 15% of U.S. jobs could beryllium eliminated implicit the adjacent 5 years.

Economists accidental that astir of the caller AI-related layoffs are constricted to the high-tech sector, portion noting that companies whitethorn not ever follow specified tools arsenic a nonstop substitute for workers.

"We are seeing a batch of layoff announcements that are supposedly related to greater usage of AI," EY-Parthenon main economist Greg Daco told CBS News. "They are aimed astatine cutting down connected labour expenses, portion AI concern is increasing precise rapidly, but I'm not wholly definite this is simply a replacement concern wherever endowment is being replaced by technology."

Some economists say AI's interaction connected the labour marketplace whitethorn beryllium emerging little done wide layoffs and much done weaker hiring. Some companies are delaying recruitment portion they measure however AI changes their staffing needs, perchance making it tougher for younger and entry-level workers to find jobs.

In different words, these businesses whitethorn not beryllium laying disconnected workers, but they're besides not creating caller jobs.

Junior workers squeezed

Lackluster hiring tin gully little attraction than layoffs due to the fact that companies seldom denote specified decisions. Research from Goldman Sachs shows that successful the past year, AI reduced monthly payroll maturation by astir 16,000 jobs, raising the unemployment complaint by 0.1 percent point.

"AI seems to beryllium impacting labour finally, but it's really not truthful overmuch done accrued layoffs. The main transmission tends to beryllium reduced hiring, particularly reduced hiring of inferior workers," Daniel Keum, subordinate prof of absorption astatine Columbia Business School, told CBS News.

Younger workers whitethorn look peculiar challenges due to the fact that entry-level roles are easier to automate than elder positions, experts said.

"The large benignant of interaction of AI volition travel from reduced hiring of juniors," Keum said, noting that "seniors are a batch much hard to replace."

AI whitethorn besides reshape occupation requirements, creating caller roles that bash not needfully align with the skills of workers displaced by automation.

"The radical who get laid disconnected don't needfully get the adjacent acceptable of jobs, due to the fact that the roles are different," said Ken Matos, an organizational scientist and manager of insights astatine hiring level HiBob.

Still, helium expects hiring to rebound aft companies implicit large AI investments.

"Right now, companies are moving labour dollars into tech investment," Matos said. "Hopefully, that moves backmost into labour dollars erstwhile the exertion is acceptable up."

Positive spin

Corporations are besides grappling with a big of different pressures, specified arsenic geopolitical tensions, fluctuating U.S. tariff policy and different sources of economic uncertainty, which could beryllium driving layoffs and crimping hiring.

But framing workforce cuts arsenic portion of an AI strategy whitethorn nonstop a much affirmative awesome to investors than citing weaker request oregon rising costs, Daco said.

"When you denote layoffs successful general, it's not seen arsenic a bully happening from markets' and investors' perspectives," Daco said. "But erstwhile you accidental you're proceeding with layoffs due to the fact that of AI, it's affirmative from a communications standpoint."

Attributing occupation cuts to AI tin assistance companies "frame a analyzable representation into a elemental connection that is easy understood," said Clarence Lee, a tech entrepreneur and prof astatine the Cornell SC Johnson College of Business.

Only astir 10% of firms presently usage AI to nutrient goods and services, and lone a subset are replacing workers with the technology, according to Daco.

"There is immoderate occupation displacement, but we are not seeing monolithic occupation dislocation arsenic a effect of AI astatine this stage," helium said.

Dan Freedman, a Google bundle technologist and subordinate of the Alphabet Workers Union, sees a nexus betwixt the caller leap successful layoffs and the propulsion to clasp AI, portion noting that helium doesn't judge the tech is replacing workers "one for one."

"AI is conscionable the latest fearfulness astir our jobs that we person to enactment done now," helium told CBS News.

What should workers do?

Experts accidental workers who harvester AI skills with adaptability whitethorn beryllium champion positioned arsenic the labour marketplace evolves.

"AI is simply a dynamic beast, truthful we are present looking for the quality to judge risk, radical who are motivated by continuous learning, who are engaged by the transformation," Matos said. "It's a property trait arsenic overmuch arsenic it's a skill-set."

Lee said workers should absorption connected knowing what AI tin bash portion identifying skills that stay uniquely human.

"That's wherever the magic unlocks," helium said.

—CBS News' Mary Cunningham contributed to this story.

Edited by Aimee Picchi

Mary Cunningham contributed to this report.

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