AI layoffs or ‘AI-washing’?

As layoffs continue to ripple through the tech industry, a key question is gaining traction: how many companies are genuinely reshaping their workforces around the realities and efficiencies of artificial intelligence — and how many are simply pointing to AI to distract from deeper business issues?

That question sits at the centre of a recent New York Times report examining what it calls “AI-washing,” a growing practice in which companies attribute job cuts to artificial intelligence even when the real causes may be more conventional, such as overexpansion during the pandemic or slowing revenue growth.

In 2025 alone, AI was cited as the reason behind more than 50,000 layoffs. Major tech companies, including Amazon and Pinterest, have cited advances in artificial intelligence to explain recent workforce reductions.

But not everyone is convinced. A Forrester report released in January challenged that narrative, arguing that many firms announcing AI-driven layoffs lack production-ready AI systems capable of replacing the eliminated roles. The report described this as a clear case of “AI-washing” — framing financially motivated cuts as a forward-looking AI strategy.

Molly Kinder, a senior research fellow at the Brookings Institution, echoed that scepticism. She noted that blaming layoffs on AI is often a “very investor-friendly message,” particularly when the alternative explanation might be far less appealing: that the company’s core business is struggling.