A growing number of companies, particularly in the technology sector, are linking job cuts to increased investment in artificial intelligence (AI), raising concerns among workers about future employment prospects.
Recent layoffs across industries have increasingly referenced AI, though companies often cite broader restructuring plans and economic pressures as primary reasons. Analysts say businesses are reallocating resources toward AI development and automation, which may reduce workforce needs in certain areas while potentially creating new roles in others.
Cisco Systems recently announced plans to cut fewer than 4,000 jobs, or about 5% of its workforce, despite reporting record quarterly revenue driven by strong demand for AI-related products. CEO Chuck Robbins said the company must make “hard decisions” to remain competitive in the AI era, while pledging support for affected employees.
Similarly, Block Inc., led by Jack Dorsey, has laid off more than 4,000 workers as part of efforts to restructure around AI-driven operations. Dorsey said smaller teams equipped with advanced tools can operate more efficiently.
Outside the tech sector, Dow Inc. announced around 4,500 job cuts earlier this year, citing a push toward streamlining operations with automation and AI integration. Meanwhile, Pinterest has reduced its workforce by nearly 15% as it shifts investment toward AI-focused initiatives and product development.
In Europe, Lufthansa Group said it plans to eliminate 4,000 positions by 2030, pointing to digitalisation and AI adoption as contributing factors.
Other major firms, including Meta Platforms, Microsoft and Amazon, have also announced significant layoffs while ramping up investments in AI infrastructure, though they have not always directly tied the job cuts to the technology.
Experts note that while AI is not always the sole driver of layoffs, it is increasingly shaping corporate strategies. Companies argue that reallocating resources toward AI may enhance efficiency and competitiveness, but uncertainty remains over how the shift will impact long-term employment opportunities.