Is ‘AI-washing’ causing current round of tech layoffs?

AI Increasingly Cited as Reason Behind Corporate Layoffs in 2025

Companies traditionally lay off employees for reasons such as missing financial targets, overhiring, economic slowdowns, tariffs, or the loss of key clients. However, a new factor is now being frequently cited: artificial intelligence.

As businesses accelerate investments in AI technologies, many are cutting jobs in anticipation of automation-driven efficiencies. According to research firm Challenger, Gray & Christmas, AI was referenced in announcements tied to more than 50,000 layoffs in 2025 alone.

Amazon is among the largest companies making reductions. The tech giant recently announced plans to cut 16,000 corporate jobs, following 14,000 layoffs last fall. In a June blog post, CEO Andy Jassy said the rollout of generative AI and automated agents would transform how work is done, adding that the company expects the technology to reduce its corporate workforce over time.

Although Jassy later downplayed the direct link between AI and layoffs, stating that many cuts were aimed at reducing bureaucracy, analysts suggest the company may be freeing up capital to invest in AI infrastructure such as data centers.

Other firms are taking similar steps. Pinterest announced last month it would reduce its workforce by about 15%, citing plans to reallocate resources toward AI-focused roles. HP Inc. CEO Enrique Lores also told investors that embedding AI across the company could result in up to 6,000 job cuts in the coming years.

Investors have largely welcomed these moves as proactive cost-cutting measures that position companies for future growth. However, some industry observers remain skeptical.

Market research firm Forrester, in a January report, argued that many companies lack mature AI systems capable of replacing human roles. The firm described the trend as “AI-washing,” where organizations attribute financially driven layoffs to future AI adoption.

As companies race to integrate artificial intelligence into their operations, questions remain about whether job reductions are truly technology-driven — or simply traditional cost-cutting measures rebranded for the AI era.