Wall Street found the perfect scapegoat for layoffs: an invisible workforce nobody can audit. Big banks and tech companies have been laying off thousands of workers while posting record profits. The reason for the layoffs, provided in more than one earnings call, is AI. According to various executives, AI has been so hugely effective that it has rendered certain employees redundant.
However, skeptics wonder if AI job displacement has truly arrived, or if the banking sector is simply “AI-washing” layoffs to mask typical restructuring.
“AI Took Your Job” Becomes the Perfect Corporate Narrative
In February, OpenAI’s Sam Altman accused some companies of AI-washing layoffs to obfuscate less desirable conditions at their firms. It’s an interesting self-own, since Altman and his competitors, like Dario Amodei, have been warning/bragging about mass white-collar layoffs for quite a while.
Perhaps, we are indeed standing on the precipice of mass layoffs. But, given all the hype and fear surrounding AI, it’s hard to know where the truth and self-serving messaging intersect. The following table shows which companies laid off the most workers as well as those that increased spending on AI. You’ll notice the disparity right away.
The fact that Altman doesn’t attribute corporate layoffs to AI, as opposed to AI actually doing people’s jobs, suggests full-scale adoption isn’t here.
AI-washing, when it was originally introduced into the lexicon, referred to deceptive marketing practices that overemphasize or outright lie about AI’s role in a product or service. Reasons for doing this are varied, but they essentially come back to a company’s desire to make customers or investors think happy thoughts about a product or a company’s profitability.
The Rise of AI-Washing and the Business of Hype
AI Now Institute at NYU coined the term in 2019, borrowing from the already-existing term greenwashing, in which companies misrepresent the environmental impact of their products or services.
Over the past few years, several companies have been accused of AI-washing. In 2023, Coca-Cola released a new soda called Y3000, which was purported to be co-created by AI, while the Atlanta-based company offered little evidence to support the claim, only that it tastes like the future.
Or, the footwear company, AllBirds, which recently ditched the shoes business entirely for AI, changing its name to NewBird AI. For this bizarre pivot, the BIRD stock price skyrocketed 500% before settling down to a 100% increase, based on a struggling company’s desperate attempt to remain solvent.
It stands to reason that if All Birds had reached the same financial crossroads a few years ago, the company might have changed their name to New Bird Blockchain and pivoted full-on to bitcoin mining or selling NFTs. But in the current feedback loop, AI has a monopoly on hype.
Why CEOs Suddenly Changed Their Tune on AI
As reported in the New York Times, less than four months ago, Bank of America CEO Brian T. Moynihan said that AI was not a threat to his 210,000 workers. Then last week, after posting an $8.6 billion profit for the first quarter, Moynihan attributed the bumper profit to AI and his ability to cut 1,000 jobs.
What exactly caused the change in optics is unclear. What is clear is that the AI firms and the corporate giants entrenched in their ecosystem, sooner than later, need validation for the billions they’ve spent on AI.
Elsewhere, tech and crypto have gotten into the layoffs act. In February, Jack Dorsey announced Block was laying off 40% of its workforce due to AI adoption. Snap and Coinbase have also announced major layoffs, both of which attribute the bloodletting to AI.
Then, there is Meta, which is slashing 8,000 jobs to allocate more money to AI development. Unlike Bank of America, which claims AI is literally doing people’s jobs, or Block, which claims AI has greatly increased productivity, Meta is firing people simply because it needs more money to throw at AI.
Pandemic Overhiring May Explain More Than Artificial Intelligence
Critics point to AI-washing in all these cases. That may be true, but it’s also possible that AI is truly displacing workers to some extent. What cannot be overlooked when considering layoffs in 2026 is the pandemic hiring boom that preceded it. During COVID, the tech and banking sectors both went on extreme hiring sprees.
What’s happening now can largely be attributed to corporations self-correcting their headcounts. Indeed, even with massive layoffs at Block and Meta, the companies’ employee counts remain at or above pre-pandemic levels.
Rather than admit to vastly overhiring in the Covid years, Mark Zuckerberg and Dorsey can portray themselves as master strategists trading layoffs for AI.
Tariffs, Energy Costs, and the Convenient AI Smokescreen
AI can also serve as a smokescreen for two major headwinds in 2026: energy prices and tariffs.
Instead of citing President Trump’s erratic tariff policies and foreign adventurism, big banks and big tech can sidestep these issues entirely and sell mass layoffs as a product of innovation.
The problem is that the metrics for AI adoption within banks and tech companies are rather opaque. To some extent, CEOs control the narrative. What is more definitive is that there was a glut of hiring during COVID. Additionally, two major inflationary forces are keeping business leaders on edge.
What role AI actually plays in layoffs, amidst its ongoing hype and increasing implementation, is unclear. Just ask a chatbot. Depending on your wording, it could either tell you it’s all AI-washing or that AI is effectively now doing every fired worker’s job.
Author: Tim Tolka, Senior Reporter
The editorial team at #MRKT3.0 has taken all precautions to ensure that no persons or organizations have been adversely affected or offered any sort of financial advice in this article.
See Also:
OpenAI Needs to Grow 20x in 5 Years. Europe Might Not Play Along.
Why AI Super PACs Are Avoiding the Word “AI” at All Costs
“The AI Layoff Trap”: Congratulations, You’ve Been Automated.
