AI layoffs raise questions over whether automation is driving job cuts

MANILA, PHILIPPINES — Across 2025 and early 2026, a wave of corporate layoffs explicitly blamed on artificial intelligence (AI) has sparked debate about whether the labor market is entering a new era of automation-driven displacement.

Companies including Block, the fintech firm led by Jack Dorsey, and software company Atlassian have cited AI as a primary reason for workforce reductions totaling thousands of employees, raising questions about whether the technology is genuinely replacing roles or serving as a convenient cover for broader corporate restructuring.

Marina Mogilko, a content creator and entrepreneur, raised a question in her YouTube channel, stating, “Your feed, my feed is full of ‘AI took my job posts.’ Is this the beginning of a jobless future? Or are companies just slapping AI on old school layoffs to make them sound innovative?”

AI cited as direct cause for major corporate layoffs

The parent company of Square, Cash App, and Afterpay, Block, announced it would lay off over 4,000 employees, or 40% of its workforce, bringing its total to less than 6,000. 

Dorsey specifically mentioned intelligent tools and AI agents as the key drivers, stating that “A significantly smaller team, using the tools we’re building, can do more and do it better. And intelligence tool capabilities are compounding faster every week.”

Atlassian was the next company to announce it would lay off around 1,600 employees, representing about 10% of its global workforce. 

The company positioned the cuts as part of a self-funding effort to make larger AI and enterprise product investments, as its CEO admitted that AI is changing the skills mix required and the jobs in some sectors. 

The company notes, “We made some structural org changes and focused on retaining Atlassians with the skills to help us thrive as an AI-first company – this included strong performers, graduates, and Atlassians with transferable skills.”

In 2025 and early 2026, employers in the United States explicitly targeted AI as the cause of tens of thousands of job losses, a massive rise compared to past years.

Experts suggest AI serves as convenient excuse for overhiring corrections

Saadia Zahidi, Managing Director of the World Economic Forum, offered a perspective on the trend based on conversations with business leaders. 

She reported that one prominent figure in employment research indicated many firms are using heightened concern around AI as a convenient moment to address overhiring that occurred three years ago during the previous economic boom. 

The timing allows companies to frame layoffs as forward-looking technological adaptation rather than simple cost-cutting.

This evaluation points to two facts: as AI possibilities continue to develop and transform the nature of some job tasks, the latest round of layoffs might be somewhat of a manifestation of the companies adding an innovative tag to the existing wave of workforce cuts. 

The phenomenon allows companies to signal technological advances to shareholders whilst secretly rectifying staffing levels that had gone overboard during the boom in business and hassle-free capital.

Anthropic study reveals which jobs face actual AI exposure today

A study released in March by Anthropic, the company behind the Claude AI assistant, examined actual AI usage in the workplace rather than theoretical automation potential. 

The research found that computer and math occupations, including software engineers and data scientists, have more than 90% of their tasks that are technically within reach of large language models. 

However, workers currently report using AI on only a fraction of these tasks, suggesting a gradual rather than immediate transformation.

White-collar positions in business and finance, computer science, law, and office administration were listed in the research as the most exposed to AI at present. Some 30% of employees are lightly exposed to AI, such as cooks, bartenders, mechanics, cleaners, and other trades and in-person service jobs. 

It is also worth noting that researchers have found that a vast majority of AI-exposed roles have experienced significant unemployment. Nevertheless, they noted a decrease in employment in those jobs, especially among the younger employees joining the labor market.

Task automation reshapes work without immediately eliminating jobs

The Anthropic study identifies a small but meaningful trend: rather than massive job eradication, AI is altering the structure of current positions. 

Routine work, which is based on rules, is being automated, and one individual can complete what previously required a department of workers or more time. This dynamic reduces the need for additional hiring even as current workers remain employed, creating a hiring slowdown that disproportionately affects new entrants to affected fields.

“Even if today’s layoffs are sometimes AI-washed for shareholders, the deeper trend is real. Routine, [rules-based] office work is under pressure. And some jobs will naturally disappear or radically change as AI gets better,” said Mogilko.

The shift moves workers from performing tasks to directing AI outputs, placing greater value on judgment, quality control, and human decision-making. 

Zahidi illustrated the scale of the challenge by asking people to imagine the global workforce as 100 workers, noting that about 50 would need reskilling by 2030. 

Of those, roughly two-thirds could be retrained for their current roles, about one-third would need to move into different jobs, and around 11 would have to transition to entirely new industries.

Human skills gain value as routine work becomes automated

Zahidi stressed, “I would say human skills have just become even more important. So, oddly enough, in a highly technologically driven world, it is the human skills that have become more important than ever before.”

The skills that have become more important, according to the Future of Jobs survey by WEF, are categorically human: personal interaction, empathy, creativity, leadership, social influence, and self-management. 

Ironically, Mogilko notes that “the more powerful the technology becomes, the more valuable the human skills become.”

Zahidi reported that although employers say they want such skills, they seldom test them during conventional interview procedures, resulting in a mismatch between the stated priorities and recruitment procedures.

The most secure jobs in the existing environment can be divided into two groups: jobs that are native to reality and require physical presence in messy working conditions, such as mechanics, electricians, and plumbers, and jobs that require the selective use of sophisticated human senses, emotional intelligence, and strategy. 

The proposed growth areas are agriculture and education, which face labor shortages globally and are relatively resistant to full automation due to their reliance on human contact and flexibility.

Zahidi said, “I remain always very optimistic and hopeful about the future. And that would maybe be my one piece of advice. Invest in yourself.”

The emerging picture is less of an immediate jobs wipeout than a gradual reshaping of work, where routine roles face growing pressure and adaptability, judgment, and human-centered skills become more valuable.

“If you treat AI as a thing that’s going to take away your job, you’ll spend the next few years really scared. If you treat it as new electricity for your career, your real job becomes to design how you’re going to use it,” Mogilko concluded.