Business Brief
AI becomes easy culprit for layoffs
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Aïda Amer/Axios
San Francisco-based Coinbase is one of the latest companies to pair layoffs with announcements that AI is changing the way the company operates.
Why it matters: Companies are increasingly blaming AI for job cuts, but a messier mix of automation, cost-cutting and market pressure are also factors.
Driving the news: Coinbase CEO Brian Armstrong told employees last month the firm will lay off about 700 workers and rebuild around "AI-native" pods.
Zoom out: Coinbase joins Block, Pinterest and Shopify in tying workforce cuts or restructurings to AI, though it is often hard to tell whether automation drove the layoffs or helped justify them.
- None of the companies appear to have offered concrete AI productivity metrics on earnings calls before the announcements.
What they're saying: Goldman Sachs economist Joseph Briggs said labor market data can help separate real AI-related job losses from corporate AI hype.
- Briggs expects AI adoption to push unemployment modestly higher over time — by about half a percentage point. He also expects AI to create new jobs that offset some of those losses.
- Still, he cautioned that unemployment could rise more sharply in the short term if companies adopt AI faster than workers can transition into new roles.
Reality check: So far, the number of jobs eliminated by AI at companies like Meta, Cloudflare and Coinbase "has been minimal," Michael Bernick, an employment and labor law attorney at Duane Morris LLP, told Axios.
- "For the most part, the rush to AI by employers has been to examine potential uses for their existing workforce in utilizing AI, and train for these uses," he added.
Follow the money: Developer and founder Mo Bitar said fears of AI-driven job losses can discourage workers from seeking raises or switching jobs.
- Goldman Sachs economist Joseph Briggs said that theory is plausible in the short term, but productivity gains have historically led to higher wages over time.
Yes, but: AI was the top-cited reason for U.S. layoffs through the first quarter.
- Briggs said AI-related layoff claims are most credible at large tech companies, where adoption is furthest along and more jobs are exposed to automation.
- For now, AI is creating more jobs than it's killing, due to a surge in data center construction, per Goldman Sachs.
The bottom line: AI-linked layoffs may be overstated in the short term, even as the technology reshapes hiring and wages over time.