AI layoffs more about ‘repositioning’ than ‘replacement’

In May 2025, Anthropic CEO Dario Amodei made headlines by predicting that AI would eliminate half of entry-level office jobs in the next one to five years.

While it would be folly to claim that any trend in the year since proves what will happen four years from now, for 2025 at least, a wave of AI-driven layoffs did not materialize, according to Gartner research.

Gartner studied nearly 1,400,000 jobs and found that only 21% of layoffs in the first half (H1) of 2025 were related in any way to AI. That percentage dropped to 13% in the second half of the year (H2).

What’s more, the bulk of those layoffs involved what Gartner terms “repositioning,” or making cuts to legacy business units to devote more resources to AI, VP Analyst Nate Suda said during a session at Gartner’s 2026 Finance Symposium/Xpo.

That phenomenon’s mostly limited to tech companies, he said. In many cases it results in firms’ hiring additional staff such as AI engineers, AI salespeople, and data center personnel, Gartner found.

“Repositioning” around AI was responsible for 17% of layoffs in H1 2025 and 7% in H2.

Other companies paused hiring in anticipation of productivity gains from AI. Suda described these hiring freezes as tentative. “What that means is they’re budgeting the headcount. Maybe they’re not initiating that hiring, and they’re checking in every month,” he said, calling it a “live experiment.”

Hiring freezes related to AI comprised around 4% of workforce changes in H1, but only 0.3% in H2. “It looms larger in the mind than it does in the numbers,” Suda said.

Perhaps the most feared type of AI layoffs—those in which AI “replaces” human employees—barely happened at all last year. Reductions in force resulting directly from AI productivity gains formed less than 1% of layoffs in H1 and 1% in 2025. (There’s even a caveat there, Suda said: Most of the productivity-related layoffs in H2 were at only two companies.)

Executives are under pressure to realize cost savings from their companies’ investments in AI. But layoffs aren’t the way to get there, Suda said. “What we’re seeing is that the work is moving within the organization, not that the work is disappearing,” he said. “AI productivity is not going to be the material driving force to allow [layoffs] to happen.”

As for layoffs so far in 2026, Apollo Global Management Chief Economist Torsten Slok wrote last week that he saw “zero evidence of job losses because of AI” in the weekly ADP employment data.

Heck, even Amodei is starting to pivot: During a recent press briefing, the quondam prophet of white-collar doom hinted that AI might transform the workforce rather than decimate it.