A stark divergence is reshaping American employment. Since December 2024, large firms with 500+ employees have added 425,000 jobs with steady growth throughout 2025. Small businesses with 1-49 employees have cut 200,000 jobs after peaking at +75,000 – a 275,000-job swing over six consecutive months. The economy is bifurcating by company size, with AI deployment amplifying the divide.
The employment divergence maps directly to company scale. Large firms (500+ employees): added 425,000 jobs with steady growth throughout 2025, benefiting from AI deployment, capital market access, and ability to absorb tariff costs. Small businesses (1-49 employees): cut 200,000 jobs after peaking at +75,000, representing a 275,000-job swing over six consecutive months. Mid-size companies (50-499 employees): added jobs but growth has plateaued. Simultaneously, higher-income and lower-income wage growth lines crossed mid-2024 and continue moving in opposite directions.
Framework Analysis
The bifurcation reveals how AI deployment advantages compound at scale. As the AI Leverage Playbook describes, organizations with resources to deploy AI effectively gain productivity advantages that translate to growth capacity. Large firms can invest in AI infrastructure; small businesses often cannot.
This connects to the shift from software to substrate – AI requires capital investment that favors well-capitalized incumbents. The employment cascade creates a reinforcing loop: large firm hiring benefits higher earners, small business cuts disproportionately affect lower-wage workers, widening the wage divergence.
Strategic Implications
The data challenges narratives of AI democratization. If AI productivity gains concentrate in large organizations while small businesses struggle to adopt, the technology may accelerate economic concentration rather than distribute opportunity. Small businesses showing superior AI productivity adoption rates may explain leaner workforces – but “lean” looks different when you’re cutting rather than growing.
The Deeper Pattern
Technology transitions often consolidate before they democratize. Mainframes favored large enterprises; PCs eventually distributed computing. AI may follow a similar pattern – but the transition period creates real economic bifurcation with lasting effects on wealth distribution.
Key Takeaway
America’s economy is splitting by company size: large firms adding 425,000 jobs while small businesses cut 200,000. AI deployment, capital access, and tariff absorption capacity all favor scale, creating a reinforcing divergence that compounds monthly.
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.
