AI washing gives CEOs cover to cut jobs without taking the blame
NEW YORK, UNITED STATES — Tech companies including Wix, Block, Snap, and Atlassian have all cited AI in announcing recent layoffs — but an MIT Sloan professor emeritus says executives have been citing technology to justify workforce reductions for 20 years, Fortune reports.
AI layoff framing follows a 20-year corporate playbook
“AI is a perfect excuse to justify big layoffs. It makes it seem as if it’s not our decision, our fault — it’s the technology,” said Paul Osterman, Professor Emeritus of Human Resources Management at MIT Sloan School of Management.
Wix CEO Avishai Abrahami called AI “the most significant shift in how companies are built since the invention of modern programming languages in the 1970s” while announcing the elimination of roughly 1,000 positions — 20% of the company’s 5,277-person workforce. Block cut 4,000 roles; Cisco cut another 4,000.
The layoff justification pattern predates AI by decades
Osterman said the tech industry has been repackaging the same workforce reduction rationale for years.
“They’ve been saying that for 20 years,” he said, noting that executives routinely cite external forces — outsourcing, automation, globalization — to frame management decisions as technological inevitability.
The tech sector has shed more than 130,000 jobs in 2026 so far, with trackers projecting the total could reach 370,000 by year end.
Contingent workers now represent 4.3% of the U.S. workforce, up from 3.8% in 2017, as companies build structural flexibility to shed staff without the accountability of a named layoff.
Osterman estimates that “disposable workers” now make up 35% of the American workforce — contractors, freelancers, and gig workers favored because they can be shed at any moment without triggering the scrutiny of a formal layoff announcement.
For BPO providers, AI washing creates a dual market signal. Clients making AI-justified cuts will need offshore delivery to maintain output — creating immediate demand — while the reputational cost of AI washing is rising as boards and investors begin distinguishing genuine AI transformation from narrative cover.
BPO operators who help clients document actual AI productivity gains, rather than just headcount reductions, position themselves as partners in the accountability story that shareholders are increasingly demanding.
