Leaders shouldn’t toss around the ‘AI’ buzzword in layoffs. Here’s why

Layoffs used to be something that made a company’s stock tank. But after Block announced layoffs recently, its stock went up. And they weren’t the only ones: Snap did the same thing a few months earlier, as did Meta and Amazon. The common thread? They all cited AI as their reason for cuts. For CEOs staring down investor pressure, the playbook has become clear: invoke AI, slash headcount, and watch the ticker go up. I’m a CEO, and I’ve been laid off before. I now advise HR and benefits leaders at Fortune 500 companies as they plan, execute, and move forward after making workforce cuts. Here’s why I’m cautioning fellow executives against jumping on the “AI” layoffs bandwagon without thinking about it from every angle. Many ‘AI-driven layoffs’ aren’t really about AI A recent Goldman Sachs survey found that only 11% of clients were reportedly cutting jobs due to AI, while LinkedIn’s hiring data signals that AI isn’t directly leading to the hiring slowdown… yet. Some of the cuts we’re watching this year are mostly about overhiring in 2021 and 2022, a cooling economy, softer consumer demand, and product bets that haven’t paid off. But those reasons don’t sound all that glamorous on an earnings call; AI does. As Tech investor Terrence Rohan put it plainly in a recent interview: “Pointing to AI makes a better blog post. Or it at least doesn’t make you seem as much the bad guy who just wants to cut people for cost-effectiveness.” It’s hard to tell today where AI is the root cause of layoffs and where it’s basically a nice narrative wrapper. But here’s the problem: Your layoff story travels further than your stock pop. Having personally experienced a layoff, I know how painful and disruptive an involuntary exit can be. And, as a CEO who reports to a board every quarter, I still have to make hard calls like any executive. But how you make them and what you say about them is the part that matters. With that in mind, th