Why Are AI Job Cuts Accelerating?

Just two years after generative AI exploded into the public consciousness, corporate leaders are becoming increasingly direct about its potential to eliminate jobs. The latest is the CEO of BT Group Plc, Allison Kirkby, who recently said that advances in artificial intelligence could lead to deeper workforce reductions than previously planned.

This follows a wave of similar declarations and actions. In April 2025, language app Duolingo said it was going “AI-first,” only adding headcount when automation isn’t possible. A World Economic Forum survey showed 41% of companies plan to reduce their workforces by 2030 due to AI. While some, like entrepreneur Mark Cuban, argue AI will create more jobs than it destroys, the warnings from executives like Anthropic CEO Dario Amodei about job displacement are becoming more urgent.

The reason for this acceleration isn't just that AI is getting smarter, but that its fundamental role is changing—from a helpful assistant to an autonomous worker.

What's Changed With AI?

The initial wave of generative AI was dominated by chatbots, which excel at responding to prompts. But the technology is rapidly evolving into what the industry calls “agents.” Agentic AI is “next-level automation,” according to Bartley Richardson, a senior director of AI at Nvidia. While a chatbot can answer a question, an agent can be given a goal and then autonomously plan and execute a series of complex actions to achieve it. This is the difference between asking an AI to draft an email and asking it to manage your entire marketing campaign.

Okta CEO Todd McKinnon notes that the industry is moving from “prototype to production,” meaning agents are starting to get access to real corporate systems and data. This shift from conversational AI to agentic AI is what business leaders see as the key to unlocking massive efficiency gains. Nvidia CEO Jensen Huang put it bluntly during an interview:

There's a trillion dollar opportunity out there to revolutionize the way companies are built and the products that companies make. Not just the way they run, but the products that they make. Every part of it is going to be revolutionized by agentic AI.

Why Are Agents So Disruptive?

The first generation of enterprise AI was largely framed as a “copilot,” a tool to augment human workers and make them more productive. But an internal study from accounting firm RSM found that while copilots offered a productivity boost of 5% to 25%, AI agents that automated entire workflows delivered gains of up to 80%.

This massive jump in efficiency is why companies are investing so heavily. RSM itself plans to invest $1 billion in AI over the next three years to deploy these agents. The trend is already showing up in the job market. Microsoft, for instance, recently laid off 6,000 workers (about 3% of its global workforce), including software engineering roles, even as CEO Satya Nadella has said up to 30% of the company's code is already written by AI. A report from employment site Indeed showed that job postings for software development roles are at a five-year low.

This shift is also reflected in user behavior. A study by AI lab Anthropic found that 79% of programmers using its Claude Code tool did so to “automate” rather than “augment” tasks. The goal is no longer just to help the human worker; it's to perform the job itself.

What Are the Challenges With AI Agents?

Despite the hype, the transition to a fully agentic workforce faces significant hurdles. A key concern is trust. A 2024 KPMG report found that the public's perceived trustworthiness of AI systems fell to 56% from 63% in 2022. Giving autonomous software access to sensitive information and the authority to execute tasks like making payments remains a major security and reliability challenge.

There are also technical and resource constraints. The evolution from simple chatbots to agentic AI will require several orders of magnitude more processing capacity. This helps explain the trillions of dollars that companies like Amazon, Microsoft, and Oracle are pouring into data centers. But it also means that the cost and energy requirements for running these sophisticated agents are immense.

Where Is Agentic AI Headed?

The debate over AI's long-term impact on employment remains deeply divided. Billionaire Mark Cuban points to historical technology shifts, like the displacement of millions of secretaries by word processing software, arguing that “new companies with new jobs will come from AI and increase total employment.”

Others, like Anthropic's Amodei, are more cautious. While he sees AI creating a “country of geniuses in a data center” capable of solving humanity’s biggest problems, he has also warned that AI could be writing most computer code within a year and that companies have a duty to be honest about the coming job displacement. The current push from boardrooms to automate tasks suggests that, for now at least, the focus is squarely on the efficiencies AI can deliver, with the full consequences for the labor market yet to be seen.

Reference Shelf:

BT CEO Says AI Advances Could Deepen Job Cuts: FT (Bloomberg)

41% of companies worldwide plan to reduce workforces by 2030 due to AI (CNN)

RSM's $1 Billion Bet Signals the Rise of AI Agents (ARPU)