Silent Purges: Companies Downplay AI's Role in Layoffs

Companies are cutting jobs in areas like content, operations, customer service, and HR, functions where AI is increasingly capable. While they often frame layoffs as reorganization, restructuring, or optimization, experts suspect that AI is driving workforce changes. IBM and Klarna are exceptions in acknowledging AI's role, while others may be using euphemisms to avoid backlash. Layoffs align with the rollout of large AI systems, suggesting jobs are being eliminated after AI introduction.

In a shift that reflects the broader adoption of artificial intelligence (AI) in the corporate world, companies are increasingly cutting jobs in areas like content creation, operations, customer service, and human resources (HR). While these layoffs are often framed as reorganization, restructuring, or optimization, experts suspect that AI is the driving force behind these workforce changes. This trend is evident in the recent layoffs announced by Indeed and Glassdoor, both job search and employee review firms under the parent company, Recruit Holdings [1].

Recruit Holdings, in an email to employees, stated that AI is transforming how job-seekers find work and how employers handle recruitment. The company is slashing approximately 1,300 jobs, representing about 6% of its workforce. The cuts will target research and development, and "people & sustainability" teams in the U.S., but other areas and regions will also be affected [1].

This move aligns with Recruit Holdings' CEO Hisayuki "Deko" Idekoba's vision of simplifying hiring using AI and technology. He noted that about one-third of the company's new programming code is written by AI, and he expects this figure to rise to one-half [1]. Similarly, IBM and fintech company Klarna have been transparent about AI replacing some human employee roles, while other firms often use vague terms like reorganization and restructuring to mask the role of AI [2].

Experts caution that the use of euphemisms can be a strategic move to avoid backlash from employees, the public, and regulators. Companies may be relying on these terms to manage optics during the transition and preserve morale [2]. However, the reality is that AI is reshaping the workforce, and this trend is likely to accelerate. According to the World Economic Forum's 2025 Future of Jobs report, 41% of employers worldwide intend to reduce their workforce in the next five years due to AI automation [2].

While AI can automate many tasks, it is not a panacea. AI might automate 70%–90% of a process, but the last mile often requires human judgment. Companies are turning to hybrid models of human plus AI, but when AI doesn't work out, they may quietly outsource or rehire globally [2].

In summary, the role of AI in job cuts is becoming increasingly visible, despite companies' efforts to frame these changes using euphemisms. The trend is likely to continue, with AI reshaping the workforce in the coming years. Companies and policymakers must navigate this transition carefully to ensure that it benefits both businesses and workers.

References:
[1] https://www.cbsnews.com/news/indeed-glassdoor-layoffs-ai-job-search/
[2] https://www.cnbc.com/2025/07/20/in-job-losses-ais-role-may-be-bigger-than-companies-say.html