Everyone’s Getting the AI Layoffs Wrong

Companies know AI can’t do your job — that’s not why they’re laying people off.

The Wrong Story About AI and Layoffs

Over the past two weeks, we’ve seen a series of major layoff announcements — Amazon cutting 14,000 corporate workers, YouTube offering voluntary exit packages, along with soft restructuring such as hiring slowdowns.

These are massive structural moves, and they have been completely misinterpreted by several media outlets. “AI is taking jobs” is the dominant narrative. But it’s not really what’s happening. At least not yet. AI is not capable of automating workflows from start to finish. Especially not thousands of workflows (no matter how many “leaked” internal memos claim automation success).

Understanding what’s actually happening matters, because it signals something much larger ahead. These layoffs aren’t isolated corporate events, they’re the early signs of how companies are reorganizing for a new era. And if this is the beginning, we can expect more rounds of restructuring to come. Inside these organizations, the question isn’t “Can AI do this job?” It’s “Who do we need to be to survive and compete in the AI age?”

Who Will Be the Amazon of the AI Era?

AI is a general purpose technology. Like the internet and electricity, these technologies drive industry-wide foundational shifts. Markets expand and disappear, new industries are created. And usually, the companies dominating pre-disruption aren’t the same dominating post-disruption. Amazon isn’t looking at AI and thinking, how many jobs will this technology save us. They are looking at AI and remembering “we were born of the last general-purpose technology (the internet). Who will be the Amazon of the AI age? It better be us, or it’s over.”

These companies are disrupting themselves versus outsourcing disruption to a new entrant. They are slimming down, flattening out so they can behave like a startup that will be coming for their market, or making their market entirely irrelevant altogether. It’s an anticipatory restructuring.

YouTube isn’t optimizing for how can AI simply support the existing platform (maybe there are some teams working on that), they are thinking much bigger picture: what does content even mean in the AI age. They are putting themselves in the eyes of cable in the 1990s and thinking, what should cable news have been asking about what the Internet would mean for how people create and share media. And we can see this in the statements companies are making.

Amazon’s senior vice president of people experience and technology stated in a recent blog post:

“This generation of AI is the most transformative technology we’ve seen since the internet and it’s enabling companies to innovate much faster than ever before. We’re convinced that we need to be organized more leanly with fewer layers and more ownership to move as quickly as possible for our customers and our business.”

Amazon knows that Amazon was invented because of the internet, so they’re looking around to think who could be the next Amazon in the AI first era if we don’t start to behave like a startup ourselves.

The CEO of YouTube states something similar:

“The next frontier for YouTube is AI, looking into the future. The next frontier for YouTube is AI which has the potential to transform every part of the platform. We need to set ourselves up to make the most of this opportunity.”

At the same time these companies are announcing layoffs, they’re making billion-dollar bets on AI infrastructure: chips, data centers, energy, and compute. These aren’t moves to boost quarterly earnings, and these companies certainly aren’t broke. They’re massive signals of what they’re really optimizing for: not short-term profits, but long-term survival. AI is expensive, and every dollar invested in the next era of competitiveness has to come from somewhere.

The Problem With the “AI Is Taking Jobs” Story

And here is why I am so adamant that people understand what’s happening. Because if the narrative “AI is taking your job” keeps dominating, people may incorrectly assume that AI isn’t capable of doing their particular job, so their role is safe. Or, they may assume that as long as they double down on mastering AI they will be safe. While the latter will help and is the right investment regardless, the truth is, whether or not AI can do your job is likely irrelevant to the fate of the job itself. It’s not what companies are optimizing for.

They are making a strategic bet that those workflows will be irrelevant in the new version of those companies. Or, if a workflow is needed, AI will be capable of it, eventually. And the incorrect narrative could also lead people to grip onto the stories about AI productivity being overhyped and companies’ disappointment, and disincentivize people from preparing for what’s going to happen.

The Next Chapter of the Workforce

The restructuring companies are going through now isn’t going to be a one-and-done change. What AI can do today will be different in 24 months, in 48 months, and so forth. Companies are going to stop hiring for as many full-time roles as they had traditionally because you don’t really even know what those roles are going to entail in 24 months or in 48 months.

We are entering into what I call the Independence Era, where the dominant fabric of the workforce will shift towards more independent, project-based, self-managed work, and we’ll move more fluidly between “companies.”

The idea of job titles will start to fade. How do you label a role that will look completely different in 18 months and likely be held by someone else? It will be skills over jobs, and in many cases, skills over experience. Jobs may be going away, but work isn’t.

What Should We Be Doing in This Moment?

First and foremost, you need to learn how to work with artificial intelligence. It’s going to become the standard platform that all workflows are built on top of, that all companies are rebuilt on top of as well. Right now we are still in the learning phase but soon AI will be seen much more like a computer, no one asks if you can use it they expect that you can.

We need to start building all of the skills that are required to thrive in the AI-first era. Skills we’ve talked about in a lot both in this newsletter and in previous episodes. Skills such as judgment: what questions do you know to ask these supercomputers? Do you know how to evaluate their responses? Critical thinking, communication, context, learning how to learn, adaptability. We are moving towards a world where we apply our judgment to direct AI systems, as leading AI Economist Ajay Agrawal told us on I’ve Got Questions.

It’s a lot to take in. Being pushed into independent, project-based work without much choice, and without the safety nets to match. But the sooner we start anticipating these shifts, the better equipped we’ll be to navigate them. I’ll keep writing and recording as this transition takes shape. This isn’t the end of work, it’s the start of something new, and we’ll be living through the first draft of it together.

You can watch my 17 minute monologue on this topic in the latest episode of I’ve Got Questions. And please get your questions ready as we will be hosting a live Q&A on YouTube soon. Details to come!