'AI-washing' rises as companies blame AI for layoffs: What to know

U.S. companies are successful superior cutback mode to commencement 2026. According to information from Challenger, Gray & Christmas, U.S. institution layoffs roseate 205% from December 2025 to January 2026.

While galore companies person pointed the icy digit of blasted astatine AI for caller layoffs, immoderate observers are opening to wonderment whether executives are utilizing the exertion arsenic an excuse to disguise different interior issues that bespeak poorly connected the institution and its leadership. Management gurus accidental that it’s a improvement known arsenic “AI-washing", e.g., blaming AI for cuts that firms truly privation to make, but don't privation to instrumentality the blasted for.

AI-washing is simply a conception that’s taking formation arsenic AI ascends successful the workplace.

In the discourse of layoffs," said Scott Dylan, laminitis astatine AI and tech money NexaTech Ventures, "is erstwhile companies property occupation cuts to artificial quality erstwhile the existent drivers are acold much mundane, specified arsenic over-hiring during the pandemic boom, borderline pressure, slowing user demand, oregon plain aged firm restructuring.”

The word borrows from "greenwashing," and it works successful overmuch the aforesaid way. “It lets companies formal up an unpopular determination successful the connection of progress,” Dylan noted.

Dylan said that the January layoff numbers from Challenger, Gray & Christmas are striking, with 108,435 occupation cuts. That’s the worst U.S. employment layoff number since 2009.

Yet, arsenic Dylan points out, erstwhile you look astatine the information much closely, AI was explicitly cited successful lone astir 7,600 of those.

“In actuality, the biggest contributors were declaration losses, marketplace conditions, and restructuring,” helium noted. “UPS cutting 30,000 jobs had thing to bash with AI and everything to bash with severing ties with Amazon. Andy Jassy himself initially linked Amazon's cuts to AI, past walked it back, pointing alternatively to over-hiring and excessively galore absorption layers. That benignant of inconsistency is precisely the problem.”

That matters due to the fact that it distorts the public's knowing of what AI tin bash today. “AI-washing feeds anxiousness that isn't grounded successful reality, and it lets executives dodge accountability for strategical missteps,” Dylan noted.

So wherefore would a CEO instrumentality a calculated hazard and blasted AI for layoffs, successful lieu of immoderate mistakes the institution has been making, for monolithic unit cuts? Management experts accidental it’s each portion of a C-suite job: blasted AI for occupation cuts and rake successful the AI-fueled gross boosts down the line.

“When enactment blames AI for workforce reductions by saying 'AI took your job,' they connection a future-oriented communicative astir innovation that investors person rewarded successful the past,” said Tamas Hevizi, main strategy serviceman astatine Tungsten Automation.