Companies are blaming AI for layoffs - but the real reason is fear of making the wrong move, a workplace guru says

"Companies blaming generative AI for layoffs may be missing the real story. Thomas Roulet, a professor of organizational sociology and leadership at the University of Cambridge, said in a LinkedIn post on Sunday that while firms, especially in tech and professional services, are pointing to generative AI as the reason for a recent spate of job cuts, the real driver is fear of making the wrong move."

""We hear a lot about firms laying off workers while blaming GenAI," he wrote, "but the broader perspective is that firms are reluctant to make any HR decisions with such a high level of uncertainty." That hesitation, he added, could have long-term effects on how workers build wealth. "It will also certainly affect career mobility, which is an important aspect of human capital development," he said."

"Layoffs across industries for different reasons At AI-first shops, cuts are framed as retooling for AI. Elon Musk's xAI shrank its generalist data-annotation ranks by a third while "surging" specialist AI tutor roles by 10 times to train Grok, while Snorkel AI trimmed 13% of its employees as it " deprioritized some legacy areas" and protected most AI jobs. Big Tech, meanwhile, often pairs reductions with an AI pivot or discipline push."

Many companies cite generative AI as the rationale for recent layoffs, but prevailing uncertainty and fear of making the wrong decision are steering firms away from decisive HR moves. Firms in tech and professional services are particularly hesitant to restructure or cut roles amid an unclear future. That indecision can undermine workers' ability to build wealth and restrict career mobility, which is vital for human capital development. Some AI-first companies reframe cuts as retooling, shifting roles toward specialist AI functions, while larger tech firms often combine reductions with AI-focused hiring or performance-driven changes.

Read at Business Insider