A growing chorus of executives has put white collar workforces on notice: Their jobs are at risk of being wiped out by artificial intelligence.
Yet above that din is a more complicated picture of how AI is currently affecting hiring.
Direct evidence of an acceleration in human obsolescence remains scant so far. In a report this week, the job and hiring consultancy Challenger, Gray & Christmas said cuts spurred by President Donald Trump’s Department of Government Efficiency remained the leading cause of job losses — especially for government, nonprofit and other sectors supported by federal funds — followed by general economic and market conditions.
Out of 286,679 planned layoffs so far this year, only 20,000 were linked to automation, the firm said — with just 75 explicitly tied to AI implementation.
“Far less is happening than people imagine,” said Andrew Challenger, senior vice president at the consultancy, referring to the impact of AI on the broader workforce in the U.S. “There are roles that can be significantly changed by AI right now, but I’m not talking to too many HR leaders who say AI is replacing jobs.”
That belies recent comments made by some of America’s most prominent executives about the impact that artificial intelligence is expected to have. Last month, Amazon CEO Andy Jassy warned that AI would “reduce our total corporate workforce as we get efficiency gains” over time. However, he did not lay out what that time frame might look like. He also said more people would likely be needed to do “other types of jobs,” ones that AI may help generate.
And while The Wall Street Journal reported comments from Ford CEO Jim Farley this week that AI would replace “literally half of all white-collar workers in the U.S.,” a clip of Farley’s presentation offered more context. The automotive executive was speaking about beefing up America’s blue-collar workforce, and appeared to be repeating the warning about a white-collar wipeout issued by the CEO of the AI company Anthropic — a contention that is still being debated. (A representative for Ford did not respond to a request for comment.)
Experts say the current era of AI is impacting the job market in more roundabout ways. Many firms are currently under tremendous pressure to cut costs given the generally uncertain economic environment spurred by the heavy cost of Trump’s tariff policy and worries about rising inflation. As a result, some companies are diverting spending that would otherwise be going to hiring more employees and shifting it toward AI software.
“There’s basically a blank check to go out and buy these AI tools,” said Josh Bersin, CEO of The Josh Bersin Company workforce consultancy. “Then they go out and say, as far as head count: No more hiring. Just, ‘stop.’ So that immediately freezes the job market.”
Among the most high-profile examples is Shopify, whose CEO told employees they must now prove why they “cannot get what they want done using AI” before asking for more employees and resources.
“What would this area look like if autonomous AI agents were already part of the team?” Shopify CEO Tobi Lutke wrote in a memo sent to employees in March. “This question can lead to really fun discussions and projects.”
The chief executive of language learning app Duolingo, Luis von Ahn, issued a similar edict in May, writing that the firm would gradually stop using contractors to do work that AI can handle and that a budget for new employees would only be given “if a team cannot automate more of their work.”
Enough firms hedging in this way, alongside a wider economic slowdown, may indeed be suppressing overall hiring, especially in business and professional services.
But those trends do not amount to large-scale replacement of existing workers by AI agents.
Then there are the firms creating the AI tools themselves — the ones other businesses are ostensibly looking to purchase and deploy to automate their workforces. These AI developers, including Dell, Google parent Alphabet, Facebook parent Meta, Microsoft and Salesforce, have been shedding workers not tied to AI product development and shifting resources toward those who are. If AI is causing job losses, it’s not because it’s doing someone else’s job. It’s because budgets — and demands on the bottom line — are changing.
The state of hiring at Microsoft is illustrative. Over the past several weeks, the tech giant — whose stock has surged 17% year to date thanks in part to the popularity of its Copilot AI tool — has announced job cuts affecting some 15,000 roles, or about 7% of its workforce.
In this case, some human replacement does appear to be occurring: CEO Satya Nadella said recently that as much as 30% of the company’s code is now written by AI — something Bloomberg News confirmed in a report showing software engineering roles made up more than 40% of the roughly 2,000 positions cut in one of the recent layoff rounds.
Yet other analysts indicated the cuts were also likely designed to offset the costs associated with Microsoft’s massive buildout of data centers designed to handle AI computer processing.
“We believe that every year Microsoft invests at the current levels, it would need to reduce headcount by at least 10,000” in order to make up for its increased capital expenditures, said Gil Luria, a tech research analyst at D.A. Davidson financial group, in an interview with Reuters.
In a note to clients, analysts with the consultancy Capital Economics said not all mentions of AI by businesses discussing their financial picture should be taken at face value.
“For some firms, AI is a way to spin job losses driven by poor financial performance in a more positive light,” they wrote.
AI is also impacting the hiring and recruiting process itself. A galaxy of startups now offers tools that can perform the job of entire HR departments, from scanning resumes to interviewing candidates. At IBM, “a couple hundred” HR workers have been recently replaced by AI agents, CEO Arvind Krishna told The Wall Street Journal in May.
Yet with those efficiencies, the company was able to hire more programmers and salespeople, he said.
“While we have done a huge amount of work inside IBM on leveraging AI and automation on certain enterprise workflows, our total employment has actually gone up, because what it does is it gives you more investment to put into other areas,” Krishna said.
For anyone struggling to find new work, AI is not without blame. But experts say economic factors continue to vastly outweigh the threat from automation.
“Our research has shown that AI will fundamentally change a whole lot of jobs, some by a lot,” said Svenja Gudell, chief economist at Indeed Hiring Lab. In the case of software developers especially, she said, roles are being completely transformed. “But does it still mean AI took that job? I don’t think so,” she said. “There’s not evidence that it’s fully replacing whole workers, or that the current slowdown can be attributed to it.”
