AI was responsible for nearly 55,000 US layoffs in 2025 – Amazon cut 14,000, Microsoft 15,000, Salesforce 4,000. Total job cuts reached 1.17 million, the highest since the Covid-19 pandemic. But here’s the twist: 55% of employers report regretting laying off workers for AI. Forrester predicts half will be quietly rehired – offshore or at lower salaries. The AI workforce transformation is messier than the headlines suggest.
The cuts span tech’s biggest names. Amazon announced its largest-ever layoff round, slashing 14,000 corporate roles “as it invests in AI.” Salesforce CEO Marc Benioff confirmed 4,000 customer support workers were cut “with the help of AI.” Workday cut 1,750 jobs (8.5% of workforce). Meta laid off 600 employees across AI infrastructure units.
The regret statistics are striking. Forrester Research found 55% of employers regret laying off workers for AI capabilities that often don’t exist yet. The prediction: half of AI-attributed layoffs will be quietly rehired, but offshore or at significantly lower salaries. The workforce transformation is happening – just not cleanly.
Framework Analysis
The layoff-regret cycle reflects the gap between AI promise and AI delivery. Companies cut workers expecting AI to replace functions that current models cannot reliably perform. The I-shaped consultant thesis suggests the winners will be workers who deeply integrate AI into specialized expertise – not workers replaced by AI or workers ignoring it.
Only 16% of individual workers had high “AIQ” (artificial intelligence quotient) in 2025. Only 23% of organizations offered prompt engineering training. The skills gap creates a paradox: companies laying off workers while lacking the AI-capable workforce to replace them.
Strategic Implications
The layoff wave is hitting entry-level hardest. Experienced workers are being laid off for AI capabilities that don’t exist yet, while new graduates find that entry-level roles have vanished. The consulting business model is being rebuilt around AI leverage – fewer junior staff, more AI-augmented seniors.
For companies, the 55% regret rate suggests over-aggressive AI replacement. The nuanced reality: AI augments some roles, eliminates some roles, and creates new roles. The companies cutting indiscriminately will rehire at higher cost.
The Deeper Pattern
Every technology transformation follows this pattern: over-optimistic automation, regretted layoffs, quiet rehiring, eventual equilibrium. AI is accelerating the cycle but not changing its fundamental shape. The winners are those who navigate the transition with nuance rather than panic.
Key Takeaway
55,000 AI layoffs in 2025 represent transformation happening faster than AI capabilities justify. The 55% regret rate and predicted rehiring suggest companies are learning that AI augments more than it replaces.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
