AI-driven layoffs climb, but the stealth effect is weaker hiring—especially for entry-level roles

U.S. companies are tying thousands of job cuts to artificial intelligence, but economists say the more pervasive impact may be a quiet slowdown in hiring—particularly for junior roles. Intuit trimmed 17% of its workforce to pivot toward AI, Meta cut 8,000 positions, and Cisco announced thousands more as it reallocates spending to automation. Outplacement firm Challenger, Gray & Christmas counts nearly 50,000 AI-linked layoffs this year, about 17% of total announced cuts.
Analysts caution that AI isn’t yet a one-for-one replacement for workers. Instead, firms are delaying recruitment while they assess how AI reshapes workflows, which may be nudging up unemployment at the margins. Goldman Sachs estimates AI reduced monthly payroll growth by roughly 16,000 jobs over the past year, adding about 0.1 percentage point to the jobless rate. The brunt is falling on entry-level positions that are easier to automate, while senior roles remain harder to replace. Companies are also using AI as an investor-friendly rationale for broader cost reductions amid geopolitical and economic uncertainty. Experts advise workers to pair AI fluency with adaptive, human-centered skills as hiring is expected to rebound once major AI investments are in place.

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