Will AI lead to major job cuts in corporate America?
Here’s what OpenAI’s ChatGPT chatbot says: “The short answer is: AI will almost certainly cause some layoffs, but it’s unlikely to eliminate most jobs outright. Instead, it’s more likely to transform the nature of many roles and reshape the workforce over time.”
A nuanced take, perhaps. But there’s evidence that a long-speculated seismic shake-up of the U.S. labor force driven by AI is starting to happen.
Amazon last week announced the elimination of 14,000 corporate jobs, representing about 4% of its total white-collar workforce. A company HR exec cited rapid developments coming in AI, saying “this generation of AI is the most transformative technology we’ve seen since the internet.” In the next few years, the e-commerce giant forecasts a net reduction in its total corporate headcount “as we get efficiency gains from using AI extensively across the company,” CEO Andy Jassy wrote in a companywide memo in June.
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On Oct. 30, Jassy downplayed the AI job-destruction narrative. He told analysts on Amazon’s Q3 earnings call the cuts are “not even really AI-driven. Not right now at least.” What they are about, he said, is “culture,” saying Amazon’s fast growth has produced “more layers” of job functions that can be streamlined. Certainly, Amazon isn’t handing out pink slips because of dire financial stress: It reported total quarterly revenue of $180.2 billion (up 13%) and net income of $21.2 billion (up 38%).
Paramount Skydance also initiated layoffs last week, targeting about 2,000 job eliminations (10% of its total workforce) after the closure of Skydance Media’s $8 billion takeover of Paramount Global less than three months ago.
In a memo to staff about the cuts, chief David Ellison didn’t specifically mention AI; he said the reductions aimed to phase out “roles that are no longer aligned with our evolving priorities.” But Ellison — son of Oracle multibillionaire Larry Ellison — has routinely espoused taking a tech-forward Silicon Valley approach to managing a major media company, by using big data and automation.
In a press briefing shortly after he clinched the Paramount pact in July 2024, Ellison said: “We view this time period as being pretty similar to some of the transitions that some of the traditional tech companies went through, such as Microsoft and Oracle, where they disrupted their own businesses to have all-time [stock] highs.”
Meanwhile, Google’s YouTube is anticipating AI-induced workforce reductions. AI is “the next frontier” for YouTube and “has the potential to transform every part of the platform,” CEO Neal Mohan wrote in a memo last week to staffers, announcing a major reorg of its product team geared around an AI-centric future.
“We need to set ourselves up to make the most of this opportunity,” Mohan said — and as part of the shift to AI, YouTube is introducing a “voluntary exit program” for employees. A spokesperson confirmed that YouTube is offering a buyout option with severance for U.S.-based workers but said no role eliminations or layoffs are part of the reorg.
AI superpowers are pumping billions of dollars into building data-processing factories. In reporting Q3 results, Meta, Google, Microsoft and Amazon each raised annual capex guidance to boost AI capacity, and they plan to continue spending heavily. Nvidia, the leading chipmaker for powering AI applications, last week became the first company to hit a $5 trillion market cap.
The dramatic impact of AI on employment is undeniable. The World Economic Forum’s Future of Jobs Report 2025 found that 40% of employers expect to reduce their workforce where AI can automate tasks. “Innovation” related to artificial intelligence could “displace” 6%-7% of the U.S. workforce in the coming years if AI is widely adopted, according to a research report from Goldman Sachs published in August 2025. However, the impact is likely to be “transitory as new job opportunities created by the technology ultimately put people to work in other capacities,” according to the report.
Most jobs at risk are entry-level, white-collar roles that can be performed more easily by computers, a World Economic Forum analysis found. The org cited research estimating that AI could replace 53% of the work done by market analysts and 67% of the tasks handled by sales reps.
But the robots are coming for many other lines of work. AI was a hot-button issue during the 2023 WGA and SAG-AFTRA strikes, as the unions feared studios would increasingly use the tech to eliminate jobs for flesh-and-blood humans. The unions ultimately won AI-related concessions from the studios in new contracts, including mandating explicit consent from actors for the use of “digital replicas.”
“AI can create a convincing simulation of a human actor, and the tech is improving at an alarming rate,”
actor and filmmaker Justine Bateman, an adviser to SAG-AFTRA, told Variety at the time — two years before the hyperrealistic AI “actress” Tilly Norwood ignited an uproar after its U.K. creator said Norwood had secured talent-agency representation.
Of course, workers’ fears about machines making them obsolete date to the dawn of the Industrial Revolution. Techno-utopians point out that, historically, advancements have led to the explosion of huge new business sectors and jobs. Just one example: Google, which didn’t exist three decades ago, employed 190,167 people as of the end of September.
Some Hollywood leaders, including Netflix co-CEO Ted Sarandos, have pushed the idea that AI is a net positive for creatives. “AI isn’t replacing storytellers — it’s creating tools that empower them to tell stories they never could before,” he said last month on an episode of the “Aspire With Emma Grede” podcast.
In the same breath, however, Sarandos wondered whether making a “$300 million or $400 million movie” makes sense if the “monetization model” doesn’t justify the math. Generative AI tools, the exec said, “can do a very similar thing for a more controllable price.” You can forgive workers in the moviemaking trenches for hearing that as code for job cuts.