Companies may be blaming AI for layoffs instead of admitting business problems after over-hiring during the pandemic.
But many of these companies do not have real AI tools ready yet. A report from Forrester says this is “AI-washing.” That means they blame AI to make layoffs sound better. It is easier to tell investors and workers that AI is the reason. Saying the business is struggling is harder to say aloud.
Researchers say AI is a good excuse for companies. Molly Kinder from the Brookings Institute calls this an “investor-friendly message.” But some say companies just have too many workers. They hired people during the pandemic and now need to cut costs.
Reports show more than 50,000 layoffs in 2025 were blamed on AI. But experts say the truth may be different. Some businesses may have made financial mistakes. They use AI as a cover-up for deeper problems.