AI has yet to live up to the claims of enormous productivity increases that will render humans obsolete in many industries. But there is no denying that workers are utterly terrified of the technology. 71% of Americans are concerned that artificial intelligence would permanently eliminate too many jobs, according to a survey conducted this summer among roughly 5,000 respondents. Companies are expressing similar worries: 40% of firms anticipate laying off employees as a result of AI automating tasks.
The truth, however, is a little more nuanced. Though the impending AI jobspocalypse doesn’t appear to be here yet, companies are using AI as an excuse for some layoffs.
According to research company Challenger, Gray & Christmas, AI was cited as the reason for only 55,000, or 4.5%, of the 1.2 million job layoffs announced by U.S. corporations in 2025—nearly twice the level in 2024. In some cases, the link to AI may be exaggerated: Companies may make vague gestures toward the rise of AI as a way to justify layoffs undertaken for other reasons, or layoffs may be carried out prematurely in anticipation of AI efficiency gains—practices that market research firm Forrester recently dubbed “AI-washing.” Meanwhile, a new research from the Yale Budget Lab shows that the idea of AI upending the job market is “largely speculative.”
Indeed, several of the largest rounds of layoffs this year—1,700 at Dutch semiconductor supplier ASML and 14,000 at Amazon—do not appear to be directly related to AI automation, but rather to mundane business tasks such as reducing corporate bloat at companies reporting strong growth.
That is not particularly comforting for workers. Layoffs at highly profitable corporations such as ASML and Amazon can wreak havoc on morale and add to a growing sense that no job is safe, whether due to AI or not.
Being the only business to supply the state-of-the-art extreme ultraviolet, or EUV, systems required for the most sophisticated processors, and the manufacturer of the lithography equipment that prints microscopic circuit designs on silicon wafers, ASML is a clear victor in the AI race. Both the gross profit and total net sales increased by 19% and 16%, respectively, over the previous year.
However, in late January, ASML announced 1,700 job cutbacks despite its surge in AI-powered profits, stating: “As our FY 2025 financial results demonstrate, we are choosing to make these changes at a moment of strength.” The layoffs, according to ASML Chief Financial Officer Roger Dassen, will eliminate unnecessary and ineffective layers and cut down on bloat. He said to reporters, “We want to make sure engineers can be engineers again.”
However, even Amazon’s boost from AI—its fourth-quarter earnings exceeded analyst projections, driven by a 24% increase in revenue in its AI-supporting AWS division—hasn’t been sufficient to save jobs from being eliminated. After announcing 14,000 job losses in October, Amazon announced 16,000 job cuts in late January.
In a June company-wide message, CEO Andy Jassy stated that Amazon anticipated laying off all of its corporate employees “as we get efficiency gains from using AI extensively across the company.” After Amazon laid off its initial group of employees, he later claimed that the cuts were motivated by “culture” and “a lot more layers” as a result of the company’s years of rapid expansion. As it invests heavily in the infrastructure build-out of its new AI data center, Amazon is trying to save expenses wherever possible. The company stated on its results call that it anticipates capital expenditures to surpass $200 billion this year, which is 60% higher than last year and significantly higher than what Wall Street had anticipated. (As a result, its shares initially fell.)
“A little bit of a hangover effect from what was a really hot labor market a few years ago, when there was intense competition for talent,” suggests Chris Martin, head researcher on Glassdoor’s economic research team, about these layoffs at generally healthy organizations. Therefore, you’ll hear businesses in similar situations declare they wish to reduce bloat, streamline, or eliminate layers of administration or bureaucracy. These businesses are doing well, yet they are choosing to reduce certain employees in order to increase profitability.
The impact that layoffs have on employees
Naturally, that argument won’t make workers feel any less uneasy because it implies that there are other job killers besides AI. And company executives who are thinking about reducing payroll should be aware of that discomfort. According to Martin, who cites Glassdoor data, layoffs at profitable organizations can “blindside” its employees, and the damage to employee morale is indistinguishable from the effect of layoffs at a struggling company.
The “drip, drip, drip” method of layoffs can also wear employees down. The “forever layoff” or layoffs that “come in never ending waves instead of a tsunami” was a pattern that Martin and his team saw at the conclusion of the previous year. Employees may perceive Amazon’s January layoffs, which came after an October reorganization, as “a continual drumbeat of trimming and dismissals,” according to Martin. This is hardly a prescription for a positive workplace atmosphere.
According to him, “it has a compounding impact on engagement because you get knocked down by the first layoff and just as you’re getting back up you get hit by another wave, and it’s really hard for employees to recover from that.”
Employee concerns about the recurring rounds of layoffs appeared to be foreseen by Beth Galetti, vice president of people experience and technology at Amazon. “As some of you may wonder, is this the start of a new pattern—where we announce significant cuts every few months?” she said in a blog post. “That isn’t our strategy.”
It’s unclear whether Amazon employees will buy that message. In discovering the “forever layoff” trend, Glassdoor research also discovered another, known as “the great employee-leader divide”: Bosses’ rising leverage has left workers “highly skeptical of what their leaders say and the decisions they make.”
