Companies around the world are undergoing significant job cuts, with thousands of positions being eliminated due to weakened consumer sentiment and the increasing adoption of AI-driven automation. Major corporations such as Amazon, Nestle, UPS, Target, and Procter & Gamble have announced reductions in their corporate workforces, resulting in over 25,000 job cuts in the US and over 20,000 in Europe. The job cuts are primarily focused on white-collar roles that are susceptible to AI automation, as companies aim to justify the billions of dollars invested in AI technology.
Amazon plans to cut up to 14,000 corporate positions, while Target will reduce its office staff by 8%. This trend is reflected in a recent survey by KPMG, which shows that AI spending among US executives has increased by 14% since the first quarter, with an average investment of $130 million projected over the next year. As a result, companies are under pressure from boards and investors to demonstrate cost savings and efficiency gains from AI.
Despite the significant job cuts, economists believe that the labor market remains in a “low-hiring, low-firing” phase, with companies quietly trimming staff by not filling vacated roles. However, if layoffs were to accelerate, it could further weaken consumer confidence and strain the broader US economy, which is already facing challenges from tariffs and persistent inflation. Allison Shrivastava, an economist at Indeed Hiring Lab, describes the current environment as a “hold-your-breath” phase, where companies are cautious while navigating economic uncertainty and AI-driven restructuring.
The shift towards AI-driven automation is likely to continue, with companies seeking to increase efficiency and reduce costs. As a result, workers in roles that are susceptible to automation may face uncertainty and job insecurity. However, it is worth noting that the labor market is still relatively stable, and the job cuts are not yet at a level that would indicate a recession. Nevertheless, the trend towards AI-driven automation is likely to have significant implications for the workforce and the economy in the coming years.