AI is frightening corporate executives – and forcing them to make layoffs. That’s what they want us to believe, anyway. So far, it looks more like a convenient excuse than a revolution.
The CEO looks concerned. “We have made the difficult decision to reduce our workforce,” he says. We’ve heard it before.
Variations on this theme are now everywhere in the business world – at tech companies especially.
Coinbase is cutting 14 percent of its staff, Cloudflare is trimming 20 percent, and Meta is laying off a tenth of its employees. But pointing at AI is easier than taking responsibility for a business that isn’t performing well enough.
The public explanation for why these thousands of jobs are disappearing always seems to be the same. It’s AI. Sometimes the company needs to invest more in AI, sometimes AI has disrupted operations, or AI has made it possible to become more efficient.
Either way, it’s AI’s fault we ended up here.
This week, Brian Armstrong, CEO of crypto company Coinbase, wrote a similar explanation for the company’s upcoming layoffs. But in the paragraph before, you could sense something else was going on. “Crypto is also facing the next phase of broader adoption,” he wrote.
A few days later, the company’s quarterly report arrived, and it became clear that the phase Armstrong is in now is something of a minor catastrophe. The company posted a large loss where analysts had expected a profit. Transaction revenues – the very foundation of Coinbase’s business as a trading platform – came in nearly half a billion kronor below expectations. The company – and the crypto market as a whole – has serious problems.
When the underlying business is limping along, it’s easier for executives to blame AI. The numbers don’t support that thesis, however, according to a new report from the Swedish Trygghetsrådet.
Between 2023 and 2025, 50,000 laid-off white-collar workers in the private sector were analyzed. So far, there are no patterns suggesting that industries or companies with high AI exposure have laid off more people than others.
Individual tasks can be affected by AI – jobs change – but the much-discussed wave of AI-driven layoffs can’t be found in the data. Even in the US, where the AI boom is biggest, unemployment is roughly the same as it was six years ago. Before ChatGPT stirred things up.
So what is actually happening? Here are three concepts that might explain what’s going on.
The first is what’s known as the Jevons paradox. It comes from a 19th-century British economist who showed that increased coal efficiency didn’t reduce demand for the resource – it increased it. The more efficient coal use became, the more coal was needed.
The same principle may apply to AI. Rather than replacing workers, AI may end up requiring more of them to manage it – because AI enables a kind of productive work that wasn’t previously possible. Microsoft CEO Satya Nadella has billions of reasons to be biased here, but he has said he believes AI is going through the Jevons paradox right now.
The second concept is Parkinson’s Law. It holds that work expands to fill the time available to complete it. Everyone has experienced this, at home as much as at work. How long does it take to clean the house? If guests are arriving in fifteen minutes, it takes fifteen minutes. Otherwise you can wander around fiddling for hours.
In an AI context, this means that while AI handles many tasks for you, you simply work on something else instead. Perhaps the remaining work now takes longer, or you’ve taken on new tasks that weren’t done before. The upshot: you’re still working full days, even with AI there to help.
The third and final concept is the simplest. Many companies aren’t doing very well right now. The global economy and stock markets are propped up by a handful of enormous tech giants, data center construction, and the promise of an imminent AI revolution. But what doesn’t show up in the indices is that a lot of businesses are struggling. And that, in turn, means layoffs happen from time to time.
Companies have struggled and laid off staff in every era. But blaming AI is easier than admitting you’ve run the business poorly. So sure, AI does serve a purpose in the workplace – it’s our era’s scapegoat. Just not a revolution in the labor market. At least not yet.
This analysis was first published in SvD Näringsliv, in Swedish, on May 10th, 2026. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.
