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As layoffs continue across many sectors, a growing number of experts believe artificial intelligence is playing a far larger role in job displacement than companies are willing to admit.
While few organizations have openly attributed staff cuts to AI adoption, some executives have acknowledged the connection.
Klarna CEO Sebastian Siemiatkowski, who earlier this year announced plans to cut 2,000 jobs from the short-term credit company, said: “The truth is, the company has shrunk from about 5,000 to now almost 3,000 employees. If you go to LinkedIn and look at the jobs, you’ll see how we’re shrinking.”
He had previously anticipated implications for white-collar jobs, saying: "And when that happens, that usually leads to at least a recession in the short term. And I think, unfortunately, I don’t see how we could avoid that with what’s happening from a technology perspective."
IBM's CEO revealed to the Wall Street Journal in May that 200 HR workers were replaced by chatbots, while its total headcount rose due to reinvestment elsewhere.
Speaking to CNBC, Christine Inge, instructor of professional and executive development at Harvard University, said: “What we’re likely seeing is AI-driven workforce reshaping, without the public acknowledgment,” adding, “Very few organizations are willing to say, ‘We’re replacing people with AI,’ even when that’s effectively what’s happening.”
She pointed to roles in HR, customer service, content and operations as early targets. “Being explicit about AI displacement invites blowback from employees, the public, and even regulators.”
‘Efficiency’ cuts more than messaging
The terms used by companies, such as restructuring, optimization, cost control, are increasingly seen by experts as euphemisms for AI-led job elimination.
“Many companies are relying on these euphemisms as a shield,” said Jason Leverant, president and COO at AtWork Group. “Companies laying off as they embrace large-scale AI adoption is much too coincidental to ignore.”
According to Candice Scarborough, director at Parsons Corporation, the timing of job cuts mirrors AI deployments. “They align suspiciously well with the rollout of large AI systems. That suggests that jobs are being eliminated after AI tools are introduced, not before.”
Scarborough added that soft language helps reduce reputational risk. “Sandbagging these cuts under bland language helps companies avoid ‘AI backlash’ while still moving ahead with automation.”
Taylor Goucher of Connext Global said the reality of automation often falls short of full replacement. “AI might automate 70% to 90% of a process, but the last mile still needs the human touch.”
Back-office jobs cut as leaders dodge AI fallout
Mike Sinoway, CEO of LucidWorks, noted that AI has not lived up to some executives’ expectations. “Higher-ups are panicking because their AI efforts aren’t panning out.”
Although the job market remains relatively solid - with the US unemployment rate at 4.1% in June - the shift is expected to gain momentum. The World Economic Forum’s 2025 report found 41% of employers plan workforce reductions due to automation in the next five years.
Anthropic CEO Dario Amodei recently warned that generative AI could eliminate up to half of entry-level office jobs.
“When the AI doesn’t work out, they quietly outsource or rehire globally,” Goucher said. “Leaders need to be more honest about where AI adds value, and where human expertise is still irreplaceable.”
Inge said, “AI writes better ad copy, but human judgment is still required. That 10% where human judgment is needed, we are not going to see that replaced in the near term.”
“Job losses will be extremely large,” she added. “The only thing we can do as individuals is adapt.”
