AI is driving more job cuts and weighing on hiring, economists say

Major corporations are accelerating AI-driven workforce reductions, with Intuit cutting 3,000 jobs (17% of its staff) to focus on AI, and Meta laying off 8,000 workers for similar reasons. Cisco also announced thousands of job cuts, citing investments in AI tools for employees. These moves follow a broader trend: nearly 50,000 AI-related layoffs have been reported in 2026, accounting for 17% of the year’s total job cuts, according to Challenger, Gray & Christmas. Economists debate whether AI is directly replacing workers or simply reshaping hiring. While some layoffs are concentrated in tech, companies may be delaying recruitment to assess AI’s impact, particularly affecting entry-level and junior roles. Goldman Sachs research suggests AI’s real disruption may lie in stifling job creation rather than mass firings. Boston Consulting Group estimates up to 15% of U.S. jobs could vanish over the next five years due to AI adoption. Meta product designer Andrew Tran, 40, lost his job in the latest round of cuts but plans to seek roles at companies using AI intentionally rather than as a cost-cutting measure. He criticized corporations for prioritizing layoffs over workforce retraining, though he clarified his views apply broadly, not specifically to Meta. The company did not respond to requests for comment. Experts warn AI’s influence extends beyond visible layoffs, with weaker hiring trends emerging as companies hesitate to fill positions amid uncertainty. EY-Parthenon chief economist Greg Daco noted that while AI investments are rising, it remains unclear whether technology is replacing talent outright or simply altering labor needs. The shift may disproportionately harm younger workers, who face greater difficulty entering a market where hiring has stalled.