Experts Accuse Companies Of 'AI Washing' For Announcing Job Cuts

Amazon recently cut 16,000 corporate roles, citing artificial intelligence (AI), and UPS announced 30,000 job cuts due to automation and AI adoption. There are other cases as well where companies announced layoffs because of AI. But is AI really the villain?

While announcing the layoffs, Beth Galetti, senior vice-president of people experience and technology at Amazon, had said in October that they restructured because "AI is the most transformative technology" they have seen since the internet, and "it's enabling companies to innovate much faster than ever before."

"We're convinced that we need to be organised more leanly," Galetti further added.

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But multinationals are facing criticism for attributing large-scale layoffs to AI advancements, a practice called 'AI-washing'. In 2025, over 1.2 million layoffs were announced, with AI cited as a factor in roughly 55,000 job cuts, a December report from the consulting firm Challenger, Gray & Christmas, revealed. While AI has impacted jobs in the real world, a report by The Guardian suggests that the number may have been exaggerated.

"You can say, 'We are integrating the newest technology into our business processes, so we are very much a technological frontrunner, and we have to let go of these people,'" Fabian Stephany, who is a departmental research lecturer at the Oxford Internet Institute, said as quoted by the media outlet.

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What is AI-washing?

AI-washing refers to companies misrepresenting their use of AI. Several critics have also argued that some companies are using AI as a convenient scapegoat for job losses. The real reasons could be over-hiring during the COVID-19 pandemic, tariffs, financial mismanagement, or simply the agenda of making higher profits.

"A lot of companies are making a big mistake because their CEO, who isn't very deep into the weeds of AI, is saying, 'Well, let's go ahead and lay off 20 to 30% of our employees and we will backfill them with AI,'" JP Gownder, a Forrester vice-president and principal analyst, said as quoted.

"If you do not have a mature, deployed-AI application ready to do the job ... it could take you 18 to 24 months to replace that person with AI - if it even works."

Experts warn that AI-washing can distort public understanding of AI's impact and undermine trust between employees and employers.