(NewsNation) — It’s easy to blame AI for the recent job-market slowdown, but a new report suggests some companies are using the technology as a convenient cover for past hiring mistakes.
According to Oxford Economics, firms do not appear to be replacing workers with AI “on a significant scale,” and there’s “little evidence” the tech is driving a sharp rise in unemployment.
“We suspect some firms are trying to dress up layoffs as a good news story rather than a bad one,” said Ben May, director of global macro research at Oxford Economics. “For example, by pointing to technological change instead of past overhiring.”
The report added that traditional drivers of layoffs remain far more common, calling early claims about AI’s current impact on the job market “exaggerated.”
Data from Challenger Gray & Christmas shows AI was cited in nearly 55,000 announced layoff plans in 2025 — about 4.5% of the roughly 1.2 million total. Other reasons, including market and economic conditions (21%), restructuring (11%) and cost-cutting (7%), were cited more often.
Framing job losses as AI-driven rather than the result of weaker demand or past overhiring is largely an investor-relations move, Oxford Economics argued in the Jan. 7 research briefing. That framing allows companies to present layoffs as forward-looking rather than corrective.
Federal Reserve Chair Jerome Powell has also been hesitant to blame AI for the recent jobs slowdown, telling reporters at a December press conference that “it’s not a big part of the story yet” while acknowledging uncertainty about how AI’s impact on the labor market could evolve.
Still, several major tech companies have referenced AI alongside recent workforce reductions, even as economists question how much the technology is currently driving job losses.
Amazon announced in October that it was cutting approximately 14,000 corporate roles as it ramps up investment in AI. Meanwhile, Salesforce CEO Marc Benioff has stated that AI has already enabled the company to eliminate thousands of customer support roles.
At the same time, separate research from LinkedIn suggests AI-related roles are among the fastest-growing jobs in 2026 — underscoring that the shift may be less about outright job losses than where companies are choosing to invest.
And despite the potential for longer-term disruption, Oxford Economics expects the transition to be gradual.
“Some surveys suggest that AI use in larger US firms has recently stalled, underlining that the impact on labor markets is likely to evolve over time rather than overnight,” Ben May said.