US Firms Charged with ‘AI Washing’ for Blaming Job Cuts on Artificial Intelligence

Over the past year, numerous corporate leaders in the United States have sought to justify widespread layoffs by attributing them to the enhanced efficiency brought about by artificial intelligence (AI). According to these executives, many roles have become redundant as technology increasingly takes over tasks that were once the domain of human workers. However, not all experts are convinced by this narrative, with some economists and technology analysts suggesting that factors such as trade tariffs, a wave of overhiring during the Covid-19 pandemic, and a straightforward desire to maximize profits are more accurate explanations for these workforce reductions.

This deliberate framing has led even some critics to coin the term “AI-washing,” where companies leverage AI as a scapegoat for layoffs, thereby presenting themselves as innovators adapting to the times. “You can easily say, ‘We are integrating the latest technology into our operations, so we must let go of employees,’” mentioned Fabian Stephany, a lecturer at the Oxford Internet Institute, highlighting the narrative often employed by CEOs.

In fact, a December report from the consulting firm Challenger, Gray & Christmas found that over 54,000 layoffs in 2025 were attributed, at least in part, to AI integration. This trend included Amazon’s dramatic announcement in January of a layoff of 16,000 workers, following a prior reduction of 14,000 employees in October.

Beth Galetti, Amazon’s senior vice president of people experience and technology, articulated in an October memo that the company’s restructuring was necessary because “AI is the most transformative technology we’ve seen since the Internet, enabling companies to innovate at an unprecedented pace.” She stressed the need for a “leaner organization” moving forward.

Even other executives, such as Enrique Lores, CEO of Hewlett-Packard, indicated during a November earnings call that AI would be utilized to “enhance customer satisfaction and productivity,” potentially enabling the firm to eliminate 6,000 jobs in the coming years.

In April, Duolingo CEO Luis von Ahn announced a transition away from contractors for tasks that AI could manage successfully, highlighting a shift many in the industry are starting to embrace. However, it appears that many layoffs shadowed by AI assertions can be traced back to motivations environmental to the companies involved.

A January report by market research firm Forrester projected that only a mere 6% of U.S. jobs would be automated by 2030. Though certain roles, particularly in call centers and technical writing, may find themselves automated, experts like Forrester vice president JP Gownder argue that there still lacks sufficient applications to handle the majority of jobs and likely will for some time.

“Companies are making serious miscalculations,” Gownder warned. “If your CEO thinks it’s feasible to lay off 20 to 30% of the workforce with AI as a replacement, they’re missing the realities of the situation. Developing and deploying effective AI solutions could take anywhere from 18 to 24 months, if they work at all.”

Attributing layoffs to AI can have its advantages despite the misleading nature of the justification. The Challenger report indicated that layoffs attributed to tariffs numbered under 8,000, a stark contrast to the claims made regarding AI-related layoffs.

“Most economists would agree that this reasoning isn’t very credible,” said Martha Gimbel, executive director and co-founder of Yale University’s Budget Lab. She pointed out the nascent state of AI, as technologies like ChatGPT have only emerged within the last few years, making it implausible for businesses to pivot workforce dynamics instantaneously due to these developments.

A news report regarding Amazon’s moves to showcase how tariffs from the Trump administration had inflated product prices led to backlash from the White House, labeling the company’s initiative as “hostile.” Following this, an Amazon representative clarified that the planned display had never received approval. According to Gimbel, there exists a tangible reluctance among parts of corporate America to openly criticize the Trump administration’s economic policies due to fear of repercussion. By positioning layoffs as a byproduct of AI, companies can sidestep potential political backlash.

In many cases, CEOs correlate layoffs with advancements in AI as a convenient explanation for what are actually costsaving measures after overhiring during the pandemic, according to Gownder.

“This overhiring was a product of low interest rates and competitive job markets, factors that are no longer prevalent,” he elaborated.

Still, there do exist credible cases where AI-induced layoffs are more justifiable. Marc Benioff, for instance, CEO of Salesforce, reported during a recent interview on the podcast The Logan Bartlett Show that his workforce had diminished from 9,000 to 5,000 due, in part, to the adoption of AI agents. “I need fewer heads,” he remarked.

Stephany corroborated this, stating that such a claim holds weight because tasks within customer service indeed align closely to functionalities that current AI systems can perform.

Nevertheless, skepticism remains critical when it comes to relying solely on CEO statements to assess how technological advancements are reshaping the labor market. Gimbel cautioned that CEO proclamations do carry incentives that could skew their narratives.

After Amazon’s vice president linked layoffs to AI advancements, the company’s CEO Andy Jassy walked back the assertion, noting that the layoffs were not primarily financially or AI-driven, but rather a reflection of company culture.

Similarly, months after Duolingo’s claims about an “AI-first” workforce model, von Ahn told the New York Times that the firm had no plans for laying off full-time employees and clarified their reliance on contractors fluctuated based on demand.

One Amazon employee recently laid off expressed skepticism about the AI justification for her termination. Identifying herself as a “heavy user of AI,” she had developed specific tools for her team. However, she later perceived her job loss as a strategic move to replace her position with a less expensive worker, rather than a genuine transition to AI.

As she recounted, “I was laid off to save the cost of human labor,” emphasizing her belief that AI served only to facilitate that shift, rather than justify her dismissal.