As 2025 comes to an end, new jobs data paint a worrying picture of the US labor market.
Employers announced even more 1.1 million jobs cut As of November, this is the highest level ever From 2020, according to a new report From global outplacement firm Challenger, Gray & Christmas.
Hidden within the broader economic restructuring is a specific, growing trend that demands attention: layoffs attributable to artificial intelligence.
In the month of November alone, employers cited AI as the reason for cutting 6,280 jobs. This brings the total number of AI-responsible layoffs this year (2025) to 54,694.
Although this is a fraction of the total number of job cuts, they still represent a growing share of job losses. To examine these numbers and what they could mean for the future of work, I spoke with Paul Roetzer, founder and CEO of SmarterX and the Marketing AI Institute. Episode 184 of the Artificial Intelligence Show.
The numbers tell just part of the story
The report highlights that the technology sector continues to lead the way in private sector workforce cuts, with cuts totaling more than 153,000 for the year. Restructuring and market conditions remain the top cited reasons for layoffs, but the news that companies are now putting specific numbers to AI displacement is a significant development.
Roetzer believes that official figures probably underestimate the true scale of what is happening inside businesses.
“Honestly, I think it’s underreported,” Roetzer says.
Companies are quietly reshaping their workforces to become leaner and more efficient, often without labeling each move as “AI layoffs.” But more and more, leadership is prioritizing teams that can leverage these tools to do more with less.
Pressure on entry-level and middle management
One of the most important questions emerging from this data is: Who is at risk of losing their job? Is it entry-level workers whose tasks are easily automated, or middle managers whose coordination roles are becoming obsolete?
Roetzer argues that right now, we’re seeing a direct impact on entry-level roles. Even though young workers are often considered “AI natives,” familiarity with the technology does not necessarily translate into business value in an AI-first world.
“They lack the business experience, instinct, and context to know how to ask the right questions for AI assistance and know what to do with the answers,” Roetzer says.
But the pressure is extending to middle management.
Roetzer suggests that over the next three to five years, middle-level managers who lack high-level strategic capabilities will find themselves increasingly vulnerable. In the future, companies won’t need humans when a single, AI-literate leader can orchestrate the output of an entire department.
“A senior leader with strong strategic capabilities and high AI literacy will be 10 to a hundred times more productive and influential,” Roetzer explains. “I think as AI agents become more autonomous and trusted, we will see a stronger distribution of senior leaders and AI agents, as well as entry levels with very little middle management.”
A reality check for 2026
No matter who is affected, it signals labor market unrest.
The transition to an AI-integrated economy is not going to be seamless, and Roetzer warns that we need to be realistic about the challenges that lie ahead, especially for those entering the workforce.
“I think people have to understand that 2026 is not going to be easy when it comes to this stuff,” Roetzer says. “There are signs, there are things that I’ve seen and heard, that tell me we’re poised for more AI-influenced layoffs.”
This is likely to be particularly relevant to the education sector and families where there are students currently in college. Traditional entry-level pathways are drying up, and finding work next summer may be significantly more difficult than in previous cycles.
The Way Up: Growth and Innovation
Despite the difficult prognosis, the solution is not to stop or retreat.
Roetzer emphasizes that the only viable way forward for individuals and organizations is to lean toward growth, innovation, and entrepreneurship. We need to create new value to replace what is becoming automated.
“Growth and innovation are the answer,” says Roetzer. “Entrepreneurship is the answer. We have to create more opportunities.”
For business leaders and employees, this means continuing to prioritize AI literacy, adaptability, and human skills like curiosity and critical thinking that machines can’t replicate.
