Nine out of ten executives privately admit that AI hasn’t improved productivity at their companies. Yet across the tech industry,AI-driven layoffs keep accelerating— with over 1,100 jobs disappearing every single working day this year. A major new study explains why that contradiction isn’t just hypocritical. It’s self-defeating.
What the Research Actually Found
<a href="https://www.nber.org/system/files/working_papers/w34836/w34836.pdf" rel="nofollow noopener” target=”_blank”>The study, led by University of Pittsburgh professor Mark Ma and backed by the Atlanta Federal Reserve, didn’t rely on vibes. The team analyzed millions of Glassdoor employee reviews, roughly 10,000 corporate earnings-call transcripts, and hundreds of AI-related layoff announcements from U.S. public companies over five years.
The headline finding is striking: about 90% of executives surveyed said AI hasn’t delivered meaningful productivity improvements. But dig into the data, and you’ll find something more interesting — and more uncomfortable for the C-suite.
Management sentiment about AI was, in Ma’s words, “consistently optimistic” across those thousands of earnings calls. CEOs love talking up their AI strategies. But that optimism had “no significant relationship to productivity outcomes.” In plain term: the hype in the boardroom isn’t showing up in the numbers.
Meanwhile, employee reviews that mentioned AI were “much more negative than the overall tone” on Glassdoor. Workers aren’t excited about AI. They’re scared of it. And that fear, the study argues, is exactly what’skeeping AI from actually working.
The Doom Loop Nobody’s Talking About
Here’s where it gets really interesting — and where we think most coverage of this study has missed the bigger picture.
The data reveals what we’d call a vicious cycle. A company announces layoffs and ties them to AI. The remaining employees see their colleagues get cut and immediately start worrying about their own jobs.
That anxiety makes them resist AI adoption — why help train the thing that might replace you? With workers dragging their feet, productivity stays flat. Executives look at those numbers and conclude they need to cut more staff.
Rinse and repeat.
Ma puts it bluntly: “Using AI to justify cutting jobs is a strategic miscalculation that cuts against the benefits of AI.” His core finding is that “employee sentiment plays a more important role in unlocking the benefits of AI than any optimism among managers.”
That’s a direct challenge to how most companies have approached this. You can’t scare your workforce into embracing the technology that scared them in the first place.
The Numbers Behind the Hype
The scale of AI-related job cuts in 2026 is hard to overstate. According toSkillsyncer data, 322 layoff events have displaced nearly 170,945 workers across tech, finance, and healthcare this year. March alone saw roughly 82,370 cuts — the worst single month in two years.
Some of the biggest names are leading the charge.Meta cut around 8,000 rolesin May. Oracle slashed approximately 30,000 jobs — close to a fifth of its global workforce. Block eliminated 4,000 positions, about 40% of its staff.
And here’s the kicker: a Gartner survey of 350 executives found that companies cutting the most showed nearly identical financial returns to those cutting the least. The layoffs aren’t paying off.
The stock market seems to agree. Ma’s research showed that average returns following AI-layoff announcements hovered near zero. More than half of those events produced negative or negligible market reactions. Investors, it turns out, aren’t impressed by “we replaced people with ChatGPT” as a strategy.
Is “AI-Washing” the Real Story?
There’s a term gaining traction that captures what’s happening: “AI-washing.” It’s when companiesuse AI as a convenient excusefor layoffs that are really about cutting costs, pleasing shareholders, or following what every other CEO is doing.
The pattern is telling. According to one analysis, 54% of 2026 layoffs now cite AI as a factor. But many of these same companies are simultaneously spending billions on AI infrastructure. If AI were truly replacing those workers, you’d expect productivity to surge. It hasn’t.
A separate MIT Media Lab study from July 2025 found that 95% of organizations saw zero measurable return on the estimated $30–40 billion spent on generative AI. And a randomized trial by research group METR showed experienced developers using AI coding tools actually took 19% longer to complete tasks.
We’re not saying AI is useless — far from it. But there’s a growing gap betweenwhat AI can actually do todayand the stories companies tell to justify restructuring.
What This Means If You’re Worried About Your Job
If you’re reading this and wondering whether AI is coming for your role, here’s what the data actually suggests.
- First, the threat isn’t as simple as “AI replaces humans.” The bigger risk right now is what Forbes calls“AI intensification” — where AI doesn’t eliminate your job but piles on more work. An analysis of 443 million hours of digital activity found that after AI adoption, email time jumped 104%, chat time surged 145%, and weekend work increased by nearly 50%. Workers aren’t being replaced. They’re beingstretched thinner.
- Second, entry-level workers are getting hit hardest. Software developer employment for ages 22–25 has dropped nearly 20% from its late 2022 peak. Junior-level tech hiring fell from about 15% to 7% of total hires since 2023. Companies are squeezing AI into the work that used to train the next generation.
- And third — this is the hopeful part — the research strongly suggests that companies treating AI as a collaboration tool rather than a replacement tool are the ones seeing real gains. Ma’s data shows employee sentiment, not management hype, is the variable that actually predicts whether AI helps or hurts.
If your company is talking about AI as a way to “do more with less people,” that’s a red flag — not because AI will take your job, but because that mindset is the exact thing preventing AI from working well.
What is AI-washing in the context of layoffs?
AI-washing happens when companies cite artificial <a href="https://bitcomme.com/ai-powered-retail-intelligence/” title=”AI-Powered Retail Intelligence”>intelligence as the reason for job cuts, even when AI isn’t actually replacing those roles. It’s a way to makecost-cutting look innovative. A White House adviser flagged this trend in 2026, noting that many companies blame AI for layoffs while spending billions on AI infrastructure that hasn’t delivered measurable returns.
How does AI affect employee mental health?
Research shows AI adoption can lead to “AI brain fry” — a form of cognitive overload linked to constant multitasking and AI supervision. A survey of nearly 1,500 workers found about 14% reported significant AI-related mental fatigue. An eight-month UC Berkeley study found workers accepted more tasks because AI made them feel easier, eventually becoming overwhelmed rather than more productive.
Are AI tools actually making developers faster?
Not necessarily. A randomized trial by research group METR found that experienced developers usingAI coding toolsactually took 19% longer to complete tasks than those working without them. The results suggest current AI tools may add complexity and context-switching costs that offset their speed advantages, at least for experienced programmers.
Which industries face the biggest risk from AI job displacement?
Tech, finance, and healthcare have seen the most AI-linked layoffs in 2026, with 322 events displacing nearly 170,945 workers. But research suggests the picture is more nuanced — AI job displacementvaries widely by role. Customer service, data entry, and content moderation face the most immediate pressure, while roles requiring complex judgment and human interaction remain harder to automate.
Can AI actually create more jobs than it eliminates?
Some data says yes. While headlines focus on cuts, several analyses show AI is generating new roles in areas like prompt engineering, AI oversight, and machine learning operations. One 2026 report found thatAI’s net impact on labor marketshas been positive in certain sectors, with new job creation outpacing displacement. The key factor seems to be how companies implement AI — as a tool for workers, not a replacement for them.
