Companies hide AI job cuts behind vague “tech update” language

A new study suggests companies may be significantly underreporting AI-related job cuts, with only 75 positions explicitly attributed to AI replacement in the first half of 2024 despite over 744,000 total layoffs in the U.S. Research from executive outplacement firm Challenger, Gray & Christmas indicates that businesses are likely disguising AI-driven workforce reductions under vague terms like “technological updates” to avoid negative publicity.

The big picture: While tech giants like Microsoft and Google report that AI is writing upwards of 30% of their code, the disconnect between AI adoption and reported job losses suggests a deliberate effort to obscure the technology’s impact on employment.

Key findings: The research reveals a stark contrast between AI’s documented capabilities and its officially reported job displacement.

• Only 75 job cuts were directly linked to AI in the first six months of 2024, compared to nearly 287,000 positions eliminated due to DOGE-led efforts and over 154,000 due to “market and economic conditions.”
• Companies are increasingly using the term “technological update” more frequently than in the past decade, potentially masking AI-related layoffs.
• Tech-linked factors including automation played a role in approximately 20,000 job cuts, but few were explicitly attributed to AI replacement.

Why companies might be hiding AI cuts: Business leaders may be avoiding direct attribution to AI for several strategic reasons.

• “Some of the AI job cuts that are likely happening are falling into that category,” without being directly blamed on AI, according to Andy Challenger, senior vice president at Challenger, Gray & Christmas.
• Companies “don’t want press on it,” particularly those sensitive to their public image or those who traditionally control media narratives carefully, like Apple.
• No company leader wants to appear as though they’ve made a business mistake by jumping on the latest technology bandwagon if it later proves problematic.

What industry leaders are saying: The debate over AI’s job impact remains contentious among tech executives and experts.

• ChatGPT itself acknowledges that “AI is changing the job market by automating certain tasks, which can reduce the need for some roles, especially repetitive or data-driven jobs.”
• Dario Amodei, CEO of AI company Anthropic, warned that AI could eliminate half of all entry-level white-collar jobs within five years.
• Mark Cuban, the billionaire entrepreneur, countered this pessimism, arguing that “New companies with new jobs will come from AI and increase TOTAL employment,” referencing how past technological revolutions created new opportunities.

What this means: The confusion around AI’s actual job impact reflects broader uncertainty about the technology’s economic implications, with even AI experts disagreeing on the extent of workforce disruption across the global economy.