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White House Science and Technology Advisor Michael Kratsios has questioned whether artificial intelligence is genuinely responsible for some of the layoffs announced by technology companies. According to Kratsios, businesses may sometimes use AI as an explanation for workforce reductions that were already planned for other reasons.
Speaking on the ‘Moonshots with Peter Diamandis’ podcast, Kratsios suggested that companies could be linking job cuts to AI, as the narrative is more appealing publicly. He said, "I think like a lot of folks these days, like when they’re doing a layoff that they would have done anyway, just like to assign it or blame it to AI because it plays better in the press."
His comments come amid growing debate over whether AI is becoming a major driver of job losses or simply being cited alongside broader restructuring efforts.
Podcast host Peter Diamandis pointed to another possible reason companies may emphasise AI when announcing workforce reductions: investor reaction. He suggested that markets could reward businesses that generate more revenue while employing fewer people. "And their stock price goes up if they are, you know, producing more revenue with fewer people," Diamandis said. "Precisely. Yeah," Kratsios replied.
The discussion highlights how AI has increasingly become part of corporate restructuring. While companies are investing heavily in automation and AI systems, workforce reductions can also result from changing business priorities, cost-cutting, organizational restructuring and efforts to improve profitability.
Several major technology companies have continued to reshape their workforces while simultaneously increasing AI investments, making it difficult to determine how much of each layoff is directly linked to the technology.
Kratsios questioned how organizations portray their layoffs. But he remains hopeful about AI's impact on jobs and believes that AI would also help create more jobs.
"I am quite bullish in the long term on the impact that AI is going to have on jobs," he noted. His statements seem to resonate with many entrepreneurs and economists who disagree that AI will lead to significant job losses. On the contrary, tech giants such as Microsoft and Meta have made major changes to their workforces while investing heavily in AI development.
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