Artificial intelligence has emerged as a defining force in the U.S. job market in 2025, with major corporations citing the technology as a key driver behind tens of thousands of layoffs, even as executives argue it will ultimately create new roles.
U.S. employers have announced about 1.17 million job cuts this year, the highest level since the COVID-19 shock of 2020, according to data from Challenger, Gray & Christmas. Of those, nearly 55,000 layoffs were directly attributed to AI, the consulting firm said, according to a report in CNBC.
The pace accelerated in the final months of the year. Employers announced 153,000 job cuts in October and more than 71,000 in November, with AI cited in over 6,000 of November’s reductions alone.
Companies facing persistent inflation, higher borrowing costs and tariff-related expenses have increasingly turned to automation as a short-term cost-cutting tool. A study released by the Massachusetts Institute of Technology in November found that AI systems are already capable of performing tasks associated with 11.7% of U.S. jobs, potentially saving employers up to $1.2 trillion in wages, particularly across finance, healthcare and professional services.
Not all experts agree that AI is the primary cause of the job losses. Fabian Stephany, assistant professor of AI and work at the Oxford Internet Institute, told CNBC that many firms may be using AI as a convenient explanation for layoffs that stem from overexpansion during the pandemic.
“Many companies significantly overhired,” Stephany said, describing the current wave of layoffs as a form of “market clearance,” rather than a sudden displacement caused solely by technology.
Several of the world’s largest technology companies have nonetheless openly linked workforce reductions to their AI strategies.
Amazon announced its largest-ever round of corporate layoffs in October, cutting 14,000 roles as it redirected resources toward artificial intelligence. CEO Andy Jassy warned earlier this year that AI would reduce the need for certain jobs while increasing demand for others.
Microsoft has cut around 15,000 jobs in 2025, with CEO Satya Nadella telling employees the company must “reimagine” its mission around AI-driven tools and platforms.
At Salesforce, CEO Marc Benioff said AI helped eliminate 4,000 customer support roles, noting that the technology now performs up to half of the company’s internal workload.
IBM has also reduced staff, including hundreds of human resources roles replaced by AI chatbots, even as it expanded hiring in software engineering and sales.
Other firms, including CrowdStrike and Workday, have similarly cited AI as a reason for trimming headcount while increasing investment in automation.
