Our Take
The layoff-as-AI-strategy narrative is self-reinforcing herd behavior, not technical inevitability, but the companies executing it know the difference and choose cost-cutting anyway.
Why it matters
If the biggest tech firms are laying off not because AI productivity demands it but because peers are doing it, then HR leaders have a choice point right now—and the cascade will accelerate or brake based on what they decide this quarter. IBM's counterexample (retraining junior HR staff to improve chatbot training) shows the path exists.
Do this week
CHRO: Map the skills your entry-level and middle-management staff bring to AI training and deployment before your board pressures you to cut headcount, so you can present growth scenarios alongside cost scenarios.
Google DeepMind CEO pins tech layoffs on imitation, not AI
Demis Hassabis, Nobel Prize winner and CEO of Google's DeepMind, told an audience at Google I/O that the wave of AI-linked layoffs sweeping Meta, Oracle, Amazon, and other tech firms is not a necessary response to AI capability but a cascade effect driven by fear of missing out. "Layoffs are the result of imitative behavior," he said. Companies are "doing it because other companies are doing it."
The narrative around those layoffs has been consistent: AI advances force efficiency gains, which justify headcount cuts. But industry analyst Josh Bersin has pushed back, arguing companies miscalculate by prioritizing cost reduction over performance improvement. Wharton's Peter Cappelli wrote for HR Executive that most companies are using AI announcements as cover for cuts driven by financial pressure or data center funding needs, not productivity necessity.
Hassabis called the layoff-first approach a "lack of imagination." The real risk, he said, is that companies see AI and layoffs as interlinked—a perspective that is "super worrying" because it closes off the possibility of deploying AI to expand talent use rather than eliminate it.
The cascade effect is real, but the choice point is now
When headlines repeat the same story loudly and often enough—AI means fewer jobs—organizations internalize it as inevitable. Hassabis is arguing that inevitability is manufactured, not technical. The problem: once layoffs start, productivity and morale on the remaining teams suffer, especially middle management, which has been hard-hit. Burnout soars. Leaner teams with AI tools don't work faster; they work stressed.
The longer-term cost is strategic. Companies that cut talent today lose the ability to explore new use cases for AI because the people who might imagine them are gone. As Jessica Stillman noted in Inc.com coverage of Hassabis's remarks: "What profit-making possibilities will you not pursue because of those job losses?"
But there is an alternative. IBM's Chief Human Resources Officer Nickle LaMoreaux presented it at The Wall Street Journal's CPO Council Summit. Instead of laying off junior HR staff who used to handle employee inquiries in call centers, IBM layered them on top of its Ask HR chatbot. Their job now: train the AI, develop new skills, improve employee engagement. The entry-level hires stay. The organization gets better AI. The talent pipeline doesn't collapse.
LaMoreaux urged other CHROs to avoid "missing the moment" by asking a different question: "What growth can AI drive? What can we do differently?" That question is not rhetorical. It is the decision point where the cascade either continues or stops.
Audit your own imitation before your board forces it
If you are an HR leader or a line manager with hiring or firing authority, the first move is diagnostic. Are you planning layoffs because your company's AI capability actually requires fewer people, or because your competitor just announced cuts and your board is watching? Be honest. The answer determines what you pitch next.
If the answer is "because everyone else is," you have time to propose an alternative. Identify roles that can evolve into AI training, quality assurance, or use-case development. Map which junior or middle-management staff have the aptitude and appetite to shift. Build the business case: faster AI, better products, retained institutional knowledge, reduced hiring and onboarding cost later.
If you move now, before the next quarter's earnings call, you can shape the narrative instead of following it. If you wait, the cascade accelerates and the option closes.