- In today’s CEO Daily: Diane Brady breaks down how CEOs are thinking about jobs and AI.
- The big story: Fed Chair Jerome Powell under investigation.
- The markets: Mixed globally, with South Korea’s KOPSI hitting a new high.
- Plus: All the news and watercooler chat from Fortune.
Good morning. At a recent CEO dinner in New York, conversation turned to the topic of jobs. 2025 was an underwhelming year for U.S. job growth—adding 584,000 jobs compared to 2 million in 2024—and this year is likely to be more of the same. (Strip out health care and social assistance industries, and the U.S. lost jobs last year.)
But the question being debated was how to talk about possible job cuts in relation to AI. “I’d rather focus on AI than falling demand,” one attendee said. “At least you look ahead of the curve instead of behind it.”
Last year, U.S. employers explicitly blamed AI for 55,000 of the 1.17 million job cuts, according to Challenger, Gray & Christmas. That’s fewer than 5% of layoffs. AI is not yet the bête noire nor the magic elixir that people have made it out to be. (Forgive the mixed metaphors there; proof of a human at the helm.) In August, MIT released a study that found 95% of generative AI pilots fail to generate meaningful return.
And yet we’re all hearing predictions about how AI is going to impact jobs, from gutting knowledge work to creating an army of AI-enhanced humans who will achieve more in 5 hours than most of us do in 5 days. If my dinner conversation is anything to go by, leaders are quite happy to stoke that debate. Here’s why:
It motivates employees. The prospect of AI can spark both fear and fascination. In either case, talking about it externally and internally is a great way to get people motivated to learn about it. The productivity boost, especially in areas like coding, can be significant. Tying it to job cuts is code for telling everyone to learn it.
It can excite investors. UPS stock jumped 8% the day that CEO Carol Tomé announced 48,000 jobs had been cut in “the most significant strategic shift” in company history. Research from the IMF, Deloitte and others confirm that public companies are quicker to resort to layoffs than their private counterparts. “I think it’s too early to quantify,” one dinner attendee told me, “but AI impacts how we think about hiring and firing.”
It focuses the mind. With geopolitical conflicts, tariffs, climate risk and general concerns about the U.S. economy, leaders have a lot of variables to juggle when deciding what to do next. Being on the cusp of a new era of innovation can simplify some of those choices. As one person put it: “I don’t know what’s going to happen in Venezuela but I do know I have to invest in AI.” Contact CEO Daily via Diane Brady at [email protected]
The post One reason CEOs tie layoffs to AI? It motivates remaining employees to adopt the technology appeared first on Fortune.
