AI, Layoffs, and the Future of Work

At the end of January, several large U.S. companies announced significant layoffs, and many of them pointed to artificial intelligence and efficiency gains as part of the reason. 

In most cases, people aren’t being replaced by AI today. Instead, companies are hiring fewer people or laying workers off so they can save money to use for AI systems they think will help them work with smaller teams in the future.

However, some replacement is already happening in specific functions. Harlequin France is ending many longstanding English-to-French literary translator contracts to switch to AI-based machine translation, with cheaper freelance editors doing postediting. Similar cuts are happening at Duolingo, and other companies like Fiverr, Ikea and Amazon are already leaning more into customer service bots and AI workers.

According to an MIT study, AI could eventually replace roughly 11.7% of the U.S. workforce.  

A quiet but important shift: entry-level jobs 

One of the strongest labour-market signals is not layoffs, but fewer entry points. Entry-level software developer hiring has declined by 10 to 20 percent in AI-exposed roles, and job postings remain far below their 2022 peak.

Many firms now believe a smaller group of senior developers using AI tools can replace the output of multiple junior roles, leading to hiring freezes, rather than mass layoffs. 

However, some companies have already adjusted their AI strategies, re-introducing more human customer support after chatbot-only service hurt satisfaction, or pausing AI-written content due to factual and quality concerns.  

A familiar moment in history 

When the internet emerged, no one fully understood how it would reshape work. Many jobs disappeared, many new ones emerged, and entire industries were rebuilt. Today, the internet is simply infrastructure. AI may follow a similar path, but the speed, scale, and uncertainty are much greater. As an employment specialist, I wonder what the real challenges will be. 

My biggest advice for job seekers is that waiting for clarity is not a strategy. 

Staying informed, understanding how AI affects your role, improving productivity, or even changing career direction early may become necessary to stay relevant. 

Cost-cutting is not new. Automation is not new. What is new is how fast this transition is unfolding. We will have to play smart and attentive. And we at Starling Community Services can help you stay on top of the shifting AI job market.