MIT Professor: Companies Use AI as 'Cover Story' for Planned Layoffs

Executive Briefing

• Wix announced 20% staff cuts (~1,000 jobs), citing AI adaptation and currency pressures as justifications.
• Block, Snap, and Atlassian echoed similar AI-driven language, favoring 'smaller, flatter' team structures.
• MIT's Paul Osterman calls it 'AI washing'—using technology as an excuse to spin layoffs as innovation.
• Cisco's stock jumped 13% after AI-framed layoffs, illustrating the market reward for such messaging.
• Osterman estimates 35% of U.S. workers are now 'disposable,' a trend intensifying amid AI uncertainty.
• Research shows contingent workers earn lower wages, report less satisfaction, and are less loyal to employers.