AI Adoption Drives Workforce Cuts, But Most Firms Avoid Disclosing The Cause, Critics Warn

As layoffs persist in a strong economy, companies are increasingly using vague terms like “optimization” and “restructuring” to conceal job cuts tied to the adoption of AI, according to CNBC. While IBM and Klarna are among the few openly acknowledging AI’s role in shrinking their workforces, most firms avoid transparency to sidestep public backlash. Analysts point to growing displacement in roles such as HR, customer service, and content creation as companies adopt generative AI tools and agentic systems. Some critics note that recent layoffs are likely linked to AI adoption rather than financial struggles, as they closely follow the rollout of large AI systems. Experts caution that AI often falls short of full automation, leading companies to quietly outsource tasks once handled by full-time staff. A June 2025 unemployment rate of 4.1% signals market resilience for now, but a World Economic Forum report projects that 41% of employers plan AI-related job reductions within five years.