One reason why CEOs associate layoffs with AI? This motivates remaining employees to learn AI
Good morning. At a recent CEO dinner in New York, the conversation turned to the topic of jobs. 2025 was a disappointing year for U.S. job growth — 584,000 more jobs, compared to 2 million in 2024 — and this year will likely be the same. (By cutting the health care and welfare sectors, the United States lost jobs last year.)
But the question debated was how talk on possible job cuts in the field of AI. “I prefer to focus on AI rather than decreasing demand,” said one participant. “At least you’re looking ahead of the curve rather than behind it.”
Last year, U.S. employers explicitly blamed AI for 55,000 of 1.17 million job losses, according to Challenger, Gray & Christmas. This represents less than 5% of layoffs. AI is not yet the bane or the magical elixir that it is made out to be. (Forgive the mixed metaphors here; evidence of a human in charge.) In August, MIT published a study that found that 95% of generative AI pilots failed to generate meaningful feedback.
And yet we all hear predictions about AI’s impact on employment, from eliminating knowledge work to creating an army of AI-enhanced humans who will accomplish more in 5 hours than most of us do in 5 days. If my conversation at dinner is to be believed, leaders are very happy to fuel this debate. Here’s why:
This motivates employees. The prospect of AI can arouse both fear and fascination. Either way, talking about it externally and internally is a great way to motivate people to learn more. The increase in productivity, especially in areas like coding, can be significant. Tying it to job cuts is code for telling everyone to learn it.
This can excite investors. UPS stock jumped 8% on the day CEO Carol Tomé announced that 48,000 jobs had been cut in the “largest strategic change” in the company’s history. Research from the IMF, Deloitte and others confirms that public companies are more likely to resort to layoffs than their private counterparts. “I think it’s too early to quantify,” one dinner attendee told me, “but AI is impacting the way we think about hiring and firing.”
It concentrates the mind. With geopolitical conflicts, tariffs, climate risk and general concerns about the U.S. economy, leaders must juggle many variables to decide what to do next. Being on the cusp of a new era of innovation can simplify some of these choices. As one person said: “I don’t know what’s going to happen in Venezuela, but I know I have to invest in AI. »
Contact the CEO daily via Diane Brady at diane.brady@fortune.com
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CEO Daily is compiled and edited by Joey Abrams, Claire Zillman and Lee Clifford.
