Key Takeaways
- Despite public apprehension, layoffs explicitly attributed to artificial intelligence constituted a negligible fraction (75) of the 286,679 job cuts announced in the US in the first half of 2025.
- Broader automation was cited in 20,000 job cuts, representing about 7% of the total, suggesting a more immediate, though still moderate, technological impact on employment.
- Analysts suspect significant underreporting, as companies often use vague terms like “restructuring” or “efficiency improvements” to describe redundancies enabled by AI, masking its true influence.
- The technology sector remains the most affected, with over 94,000 global job losses in the first half of 2025, as firms simultaneously increase AI investment and reduce headcount.
Despite pervasive concerns about artificial intelligence displacing workers, data from the first half of 2025 indicate that only a small fraction of announced job cuts in the United States are explicitly linked to AI, with broader automation accounting for a modest portion of total layoffs. This pattern underscores a nuanced reality where technological advancements influence employment indirectly through efficiency gains and restructuring, rather than overt replacement, prompting a closer examination of labour market dynamics amid accelerating AI adoption.
The Scale of Layoffs in 2025
Announced job cuts by US-based employers reached 286,679 in the first six months of 2025, spanning various sectors including technology, manufacturing, and services. This figure represents a continuation of post-pandemic adjustments, with economic pressures such as rising interest rates and supply chain disruptions contributing to workforce reductions. For context, the comparable period in 2024 saw 363,832 planned layoffs, indicating a year-over-year decline of approximately 21%.
Within this total, automation-related layoffs amounted to 20,000 positions, equating to about 7% of all announced cuts. Of these, a mere 75 were directly attributed to artificial intelligence, highlighting a discrepancy between public perceptions of AI as a job killer and the explicit rationales provided by companies. Instead, common justifications include cost-cutting (responsible for 85,000 cuts) and market demand shifts (linked to 45,000). These statistics suggest that while AI tools are increasingly integrated into operations, firms may be framing redundancies under broader categories like “restructuring” or “optimisation” to mitigate reputational risks.
Sector-Specific Impacts
The technology sector has borne the brunt of these developments, with over 94,000 global job losses in 2025. Major firms such as Intel, Microsoft, and Meta have announced significant reductions: Intel plans to eliminate 15% of its workforce, or roughly 15,000 roles, following a quarterly revenue of USD 12.86 billion that fell short of adjusted earnings expectations as of 24 July 2025. Microsoft and Meta have similarly trimmed staff amid investments in AI infrastructure, though official statements emphasise strategic realignments rather than direct AI substitution.
In manufacturing, automation’s role is more pronounced. For instance, Bosch announced cuts of up to 1,100 jobs by 2029, citing a declining automotive market, which aligns with broader trends where robotic systems and AI-driven processes reduce demand for manual labour. Historical comparisons reveal an interesting pattern: in 2023, AI was cited in nearly 4,000 tech sector layoffs in May alone, contrasted with the subdued explicit mentions in 2025.
| Sector | Total Layoffs (Jan-Jun 2025) | Automation-Related | AI-Explicit |
|---|---|---|---|
| Technology | 94,000 (global estimate) | 12,500 | 50 |
| Manufacturing | 35,000 | 5,000 | 15 |
| Services | 50,000 | 2,500 | 10 |
| Total | 286,679 | 20,000 | 75 |
Note: Figures are US-focused unless specified; global tech estimate derived from aggregated news sources as of 30 July 2025.
Underreporting and Indirect Effects of AI
Analysts suspect that the true impact of AI on employment is underreported. Outplacement data indicates that companies often use euphemistic language—terms like “reorganisation” or “efficiency improvements”—to describe cuts enabled by AI technologies. A report from Challenger, Gray & Christmas notes that while only 75 cuts were explicitly tied to AI in the first half of 2025, the technology’s role in broader automation likely contributes to a higher effective tally. This mirrors findings from 2024 surveys, where 44% of business leaders anticipated AI-driven layoffs, yet actual attributions remained low.
Broader economic indicators support this view. The US Bureau of Labor Statistics reported an unemployment rate of 4.1% as of June 2025, up from 3.6% a year prior, with job openings in information technology declining by 15% year-over-year. Forecasts from McKinsey suggest that up to 12 million workers could be displaced by AI by 2030, while Goldman Sachs estimates 300 million global jobs are at risk. In 2025, entry-level roles in knowledge work, such as coding and data analysis, are particularly vulnerable, with predictions of 56% elimination over five years from earlier studies now manifesting in prolonged job searches and vanishing positions.
Sentiment from verified accounts on platforms like X reflects growing anxiety: discussions highlight warnings from AI lab executives at Google, OpenAI, and Anthropic about models becoming inscrutable, potentially exacerbating unemployment to 10-20% in white-collar sectors. It is important to note, however, that these are expressions of sentiment and not factual projections.
Corporate Responses and Upskilling
Companies are responding by increasing AI investments while promoting upskilling. Salesforce and Amazon executives have publicly discussed AI’s productivity benefits, with internal memos indicating that automation handles routine tasks, freeing workers for higher-value roles. Yet, reports suggest that skill mismatches are driving middle and senior-level IT redundancies, with over 94,000 tech jobs cut globally in 2025.
- Intel: Post-earnings layoffs announced 24 July 2025, amid USD 12.86 billion revenue.
- Microsoft: Staff reductions tied to AI spending increases, per Q2 2025 filings (Apr-Jun).
- Meta: Similar patterns, with emphasis on efficiency rather than direct AI attribution.
Historical data from 2023 shows AI responsible for 4,000 US tech layoffs in May, a figure that has not scaled proportionally, possibly due to reporting caution.
Macroeconomic Implications
The limited explicit linkage to AI may reflect regulatory scrutiny and public backlash, as evidenced by commentary warning that short-term profit gains from AI layoffs could lead to long-term regrets. Broader automation has displaced roles in sectors like retail and logistics, with 20,000 cuts in the first half of 2025. Compared to 2024’s 363,832 total layoffs, the decline suggests stabilising conditions, yet AI’s indirect effects—through enhanced productivity—could suppress hiring.
Policy responses are emerging: governments are being urged to address potential spikes in unemployment, with calls for retraining programmes. As of 30 July 2025, the European Union has proposed guidelines on AI ethics in employment, while US lawmakers debate similar measures.
In summary, while explicit AI-attributed layoffs remain negligible, the technology’s pervasive influence on automation and efficiency is reshaping labour markets. Investors should monitor sector-specific trends, particularly in technology, where AI investments coincide with workforce adjustments.
References
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