Forget AI — Bad Strategy Is the Real Reason Companies Are Cutting Jobs

Every week seems to bring another headline about a company cutting jobs "because of AI." But one CEO is pushing back hard on that narrative — and the numbers support his argument. WHOOP founder and CEO Will Ahmed recently made waves in Fast Company by arguing that most companies blaming artificial intelligence for layoffs are using it as a convenient cover story for deeper business problems. At Metaintro, we track workforce trends daily — and this one matters for every job seeker watching the market right now.

What's Really Driving Mass Layoffs in 2026?

According to Will Ahmed, the answer is straightforward: business underperformance. In a piece published by Fast Company, the WHOOP CEO wrote that "many of these 'AI layoffs' are just companies underperforming or lacking a bigger market opportunity." He added plainly: "Investing in talent and AI tools are not mutually exclusive."

Ahmed's company makes health and fitness wearable technology, and his perspective comes from a position of growth. WHOOP currently employs about 800 people and plans to add more than 600 new roles in 2026 — nearly doubling its workforce. That makes Ahmed an outlier in a tech landscape where layoffs have become routine, and his willingness to call out the real reasons behind job cuts carries weight.

So what is actually driving the layoffs? The evidence points to several factors that have nothing to do with artificial intelligence:

Financial underperformance and cost-cutting. Many companies that announced "AI-related" layoffs were already struggling with declining revenue, missed earnings targets, or bloated cost structures from the pandemic-era hiring boom. When a company needs to trim headcount, blaming AI sounds more forward-thinking than admitting the business isn't performing well.

Post-pandemic workforce corrections. Between 2020 and 2022, tech companies hired aggressively to meet surging digital demand. As that demand normalized, many found themselves overstaffed. The resulting corrections have been playing out over the past two years, with AI providing a convenient narrative for what is fundamentally a market correction.

Shareholder pressure and restructuring. In Ahmed's view, framing layoffs around AI offers a more palatable story for investors. Telling shareholders "we're restructuring to leverage AI" sounds strategic. Telling them "we overhired and revenue is flat" does not. A Goldman Sachs survey found that only 11% of companies across industries were actively cutting employees as a direct result of AI. Meanwhile, 47% reported using AI primarily to boost productivity and revenue — not to replace workers.

Industry consolidation. Mergers, acquisitions, and market consolidation continue to drive job losses across sectors. When two companies merge, duplicate roles get eliminated regardless of whether AI exists or not.

Is AI Being Used as a Scapegoat for Layoffs?

The short answer: yes, and the people who would know best are saying it openly.

OpenAI CEO Sam Altman — the person arguably most responsible for the current AI boom — acknowledged in February 2026 that companies are engaging in what he called "AI washing" when it comes to layoffs. Speaking to Fortune, Altman said: "I don't know what the exact percentage is, but there's some AI washing where people are blaming AI for layoffs that they would otherwise do."

That admission from the head of the world's most prominent AI company is significant. If even Sam Altman thinks companies are using AI as cover, the pattern is hard to ignore.

The data backs this up. According to outplacement firm Challenger, Gray & Christmas, AI was cited in approximately 55,000 layoff announcements in 2025. That sounds alarming until you consider context: total announced job cuts topped 1.1 million that year, the highest since the pandemic. AI-attributed layoffs represented less than 5% of the total. The vast majority of job losses were driven by traditional factors — restructuring, cost-cutting, declining demand, and corporate reorganization.

Goldman Sachs economists recently estimated that the sectors most exposed to AI had seen only 5,000 to 10,000 monthly net job losses — a figure that barely registers in a U.S. labor market that employs over 160 million people. Research found no significant differences in unemployment duration or occupational mix changes for workers in AI-exposed roles from the release of ChatGPT through late 2025.

Nearly six in ten hiring managers surveyed admitted they emphasize AI in layoff announcements because it "plays better with stakeholders" than admitting to financial constraints. That number alone tells you everything about why "AI layoffs" have become the go-to headline.

Why Are Companies Blaming AI Instead of Telling the Truth?

The incentives to blame AI are powerful. For executives, the AI narrative serves multiple purposes simultaneously:

It signals innovation to investors. A company that says "we're replacing roles with AI" sounds like it's on the cutting edge. A company that says "we're cutting costs because revenue dropped" sounds like it's in trouble. The difference matters when stock prices are involved.

It reduces employee backlash. Workers who believe they were displaced by an unstoppable technological force may feel less anger toward management than workers who believe they were laid off because of poor business decisions. Framing layoffs as an AI inevitability makes them feel less personal.

It provides cover for strategic mistakes. Companies that overhired during the pandemic boom, expanded into unprofitable markets, or failed to adapt to changing consumer behavior can use AI as a catch-all explanation that avoids accountability for specific leadership failures.

It follows the herd. Once a few major companies started citing AI in their layoff announcements, others followed. There's safety in numbers — if everyone is doing "AI layoffs," no single company stands out for criticism.

Will Ahmed's counter-example at WHOOP demonstrates that the AI-or-people framing is a false choice. "Right now, companies are debating whether to hire more people or just invest in AI," Ahmed told Bloomberg. "We are doing both." His company plans to use AI tools to amplify what its researchers, engineers, designers, and clinicians can accomplish — not to replace them.

What Should Workers Actually Watch For?

If AI isn't the primary driver of layoffs, what should job seekers and employees actually be paying attention to? Here are the real warning signs:

Watch the financials, not the press releases. When a company announces layoffs, look at its recent earnings reports. Declining revenue, shrinking margins, and missed growth targets are far more reliable indicators of why cuts are happening than whatever reason the company gives publicly.

Look at who is being cut and who is being hired. If a company lays off 500 people in one department while hiring 300 in another, that's a restructuring — not an AI replacement. Many "AI layoffs" are actually reorganizations where companies shift investment from one area to another.

Pay attention to the company's actual AI capabilities. Many companies citing AI as a reason for layoffs have minimal AI infrastructure in place. If a company doesn't have significant AI products, AI research teams, or AI-integrated workflows, its claims about AI-driven efficiency gains should be met with skepticism.

Consider the broader economic context. Interest rate changes, consumer spending shifts, industry cycles, and regulatory changes all impact hiring and firing decisions. These structural factors explain far more layoffs than AI adoption does in 2026.

How Are Companies That Are Actually Using AI Handling Workforce Decisions?

The most telling evidence against the "AI layoffs" narrative comes from companies that are genuinely investing in artificial intelligence. Rather than replacing workers, many are finding that AI creates demand for new roles and amplifies existing ones.

WHOOP is perhaps the most visible example right now. The company's plan to hire 600 people in 2026 — primarily in Boston — includes roles in engineering, data science, design, and clinical research. Ahmed's argument is that AI tools make each of these workers more productive, which in turn creates more business opportunity, which justifies hiring more people. It's a virtuous cycle rather than a replacement cycle.

This perspective aligns with what labor economists have been finding. The Goldman Sachs research showing that 47% of companies use AI primarily for productivity and revenue growth — rather than cost-cutting — suggests that the dominant corporate use of AI is additive, not subtractive. Companies that deploy AI effectively tend to find new opportunities that require human workers to execute.

The pattern mirrors previous technology waves. When ATMs were introduced, bank teller jobs didn't disappear — they actually grew because ATMs made it cheaper to open new branches, which created more teller positions. When e-commerce exploded, retail jobs shifted rather than vanished. The same dynamic appears to be playing out with AI, but the narrative hasn't caught up to the reality.

As Metaintro CEO Lacey Kaelani told People Managing People, "AI is not completely eliminating roles, but instead restructuring roles and therefore slowing hiring for some jobs." That distinction matters enormously for workers trying to understand what's happening in the job market. The threat isn't that AI will take your job overnight — it's that companies may use AI as an excuse to make cuts they were going to make anyway, while the actual restructuring of roles happens more gradually than headlines suggest.

What Does This Mean for Job Seekers Right Now?

The gap between the AI layoff narrative and reality creates both risks and opportunities for workers navigating the 2026 job market.

Don't panic about AI replacing your job — but do adapt. The data shows that AI is not causing mass unemployment. However, it is changing what employers expect from candidates. Workers who can demonstrate how they use AI tools to be more productive will have an advantage over those who can't. The shift is about augmentation, not replacement.

Be skeptical of layoff explanations. When you see "AI layoffs" in a headline, dig deeper. Is the company actually deploying AI in meaningful ways, or is it using the buzzword to soften the blow of business underperformance? Understanding the real reason behind a layoff can help you target your job search more effectively.

Look for companies that are investing in both people and technology. Ahmed's example at WHOOP illustrates a healthier model: companies that view AI and human talent as complementary rather than competing investments tend to be better employers with stronger growth trajectories. These are the companies worth targeting in your job search.

Focus on skills that AI amplifies rather than replaces. Critical thinking, relationship building, creative problem-solving, strategic decision-making, and domain expertise remain firmly in human territory. AI is excellent at processing data and generating outputs, but it still requires human judgment to direct, evaluate, and apply those outputs effectively.

The bottom line is this: the next time you see a headline about thousands of jobs being cut "because of AI," remember Will Ahmed's words. Many of those companies are underperforming or lack market opportunity. AI is the story they're telling — not the reason they're making cuts. For job seekers, the most important thing is to see past the narrative and focus on what's actually happening in the industries and companies you're targeting.

People Also Asked

Q: Are AI layoffs real or are companies just using AI as an excuse?

A: While AI is genuinely changing some job functions, the data suggests most layoffs attributed to AI are driven by other factors. Challenger, Gray & Christmas data shows AI-cited layoffs accounted for less than 5% of the 1.1 million job cuts in 2025. Even OpenAI CEO Sam Altman has acknowledged that companies engage in "AI washing" — blaming AI for layoffs they would have made regardless. The real drivers tend to be financial underperformance, post-pandemic workforce corrections, and shareholder pressure.

Q: How many jobs has AI actually eliminated in 2025 and 2026?

A: Approximately 55,000 layoffs in 2025 were officially attributed to AI, according to Challenger, Gray & Christmas. However, Goldman Sachs economists estimated that sectors most exposed to AI experienced only 5,000 to 10,000 monthly net job losses — a tiny fraction of the 160-million-strong U.S. workforce. Research has found no significant AI-related changes in unemployment duration or occupational mix through late 2025, suggesting the actual impact on total employment remains minimal so far.

Q: What companies are hiring instead of laying off workers in 2026?

A: WHOOP, the health and fitness wearable company, is one notable example — CEO Will Ahmed announced plans to add over 600 jobs in 2026, nearly doubling the company's 800-person workforce. Ahmed argues that investing in both AI tools and human talent is the smarter strategy. Companies that view AI as a complement to their workforce rather than a replacement tend to be growing, and job seekers should prioritize these employers in their search.

Looking for your next opportunity? Don't let misleading "AI layoff" headlines discourage you — the job market is more nuanced than the narrative suggests. Metaintro delivers the latest hiring trends, layoff updates, and career insights straight to your inbox so you can make smarter moves. Sign up today and stay ahead of what's really happening in the workforce.