A reason CEOs link layoffs to AI? It encourages remaining employees to adopt the technology

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  • In today’s CEO Daily: Diane Brady examines how CEOs are discussing jobs and AI.
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Good morning. At a recent CEO dinner in New York, the discussion turned to jobs. 2025 saw lackluster U.S. job growth—adding 584,000 jobs compared to 2 million in 2024—and this year is expected to follow a similar pattern. (Excluding health care and social assistance sectors, and.)

But the topic under debate was how to discuss potential job cuts in the context of AI. “I’d rather highlight AI than declining demand,” one participant noted. “At least it makes you seem forward-thinking rather than backward-looking.”

Last year, U.S. employers directly attributed 55,000 of the 1.17 million job cuts to AI, per Challenger, Gray & Christmas. That accounts for less than 5% of layoffs. AI is neither the feared villain nor the miracle solution it’s often portrayed as. (Apologies for the mixed metaphors; a sign of human involvement.) In August, MIT research found that 95% of generative AI pilot projects fail to yield meaningful returns.

Still, we’re all hearing forecasts about AI’s job impact—from decimating knowledge work to creating a cohort of AI-augmented individuals who’ll accomplish more in 5 hours than many do in 5 days. Based on my dinner discussion, leaders are eager to fuel this debate. Here’s why:

It motivates employees. The possibility of AI can trigger both fear and intrigue. Either way, discussing it internally and externally is an effective way to encourage people to learn about it. The resulting productivity gains can be substantial. Linking it to layoffs is a way of signaling that everyone should adopt the technology.

It can excite investors. stock jumped 8% the day that CEO Carol Tomé announced 48,000 jobs had been cut in “the most significant strategic shift” in company history. Research from the IMF, and others confirm that public companies are quicker to resort to layoffs than their private counterparts. “I think it’s too early to quantify,” one dinner attendee told me, “but AI impacts how we think about hiring and firing.”

It focuses the mind. With geopolitical tensions, tariffs, climate risks, and uncertainties around the U.S. economy, leaders have numerous factors to consider when planning next steps. Being at the start of a new innovation era can streamline some of these decisions. As one individual put it: “I don’t know what will happen in Venezuela, but I do know I need to invest in AI.”

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