Amid continued corporate layoffs and a resilient economy, a growing number of industry experts suggest that artificial intelligence is playing a larger, and more concealed, role in workforce reductions than companies are publicly acknowledging.

While terms like “restructuring” and “optimization” dominate press releases, the timing of layoffs often coincides with large-scale AI deployments, especially in departments like HR, finance, and customer service.

IBM and Klarna have been rare exceptions in their transparency.

Arvind Krishna, IBM’s CEO, admitted earlier this year that hundreds of HR roles had been eliminated and replaced by AI systems, even as the company reinvested in other areas. Klarna, too, has openly discussed a workforce drop from 5,000 to 3,000 as AI takes over internal operations.

But experts argue that these are just the visible edge of a much wider trend.

Many firms are deliberately vague, choosing euphemisms to avoid the backlash that could come from being honest about AI-driven job loss.

Why It Matters: Without transparency, employees are left unprepared for sudden workforce shifts, and the broader public remains unaware of how far automation is progressing. The gap between what companies say and what they do could shape overall job markets as well as trust in corporate leadership.

• AI’s Workforce Impact Is Being Softened: Companies are increasingly using terms like “restructuring,” “efficiency improvements,” or “operational optimization” to frame layoffs that are, in reality, tied to AI replacing human labor. This euphemistic language helps minimize controversy and deflect attention from the true cause of workforce reductions. Experts suggest that many of these layoffs are driven by AI implementations, especially in departments where automation now handles tasks such as benefits administration, document processing, and customer queries.

• A Glimpse Into What Most Companies Are Not Saying: IBM was unusually transparent when CEO Arvind Krishna announced the company had paused hiring in back-office roles and let go of 200 HR employees, replacing them with AI tools. Klarna, too, has not shied away from revealing that its significant headcount reduction aligns with its AI rollout. Their admissions contrast sharply with the silence of most large firms, and highlight the growing internal transformation quietly taking place across industries.

• The Disconnect Between Performance and Cuts: Microsoft recently announced that it would reduce its global workforce by 3%, affecting approximately 7,000 employees, despite reporting $25.8 billion in net income for the quarter. While the company framed the move as a “strategic reorganization,” it comes as Microsoft deepens its focus on AI and cloud services. Observers view this as further evidence that AI is becoming a primary driver of workforce change, just not one companies are eager to discuss openly.

• Suspiciously Aligned With AI Capabilities: Roles in customer support, HR, finance, operations, and even marketing are among the most vulnerable, as AI tools become increasingly capable of handling structured, repetitive, and rules-based tasks. Many of the layoffs are concentrated in exactly these areas, suggesting that the correlation with AI deployment is not incidental. However, without explicit acknowledgment from companies, workers have little insight into what roles are most at risk or how to prepare for what’s coming next.

• It’s About Risk Management: Publicly stating that workers are being replaced by AI opens companies to criticism from employees, regulators, and the media. By keeping messaging vague, firms can continue to push forward with AI adoption without igniting backlash. But this approach also delays critical conversations around upskilling, reskilling, and equitable transitions, placing the burden of adaptation squarely on workers rather than on corporate leadership.

Go Deeper -> In recent layoffs, AI’s role may be bigger than companies are letting on – CNBC

AI’s Impact on Jobs: IBM Chief Sounds the Alarm – The National CIO Review

Tech Giant Microsoft Slashes Jobs Despite Strong Financials – The National CIO Review