Tech Explained: Here’s a simplified explanation of the latest technology update around Tech Explained: AI-Washing Exposed: Are 50K+ Layoffs Really About Automation? in Simple Termsand what it means for users..
More than 50,000 workers lost their jobs in 2025 because of AI, or so their employers claimed. But a growing wave of skepticism suggests something else is going on. Companies from Amazon to Pinterest pointed to artificial intelligence when announcing workforce reductions, yet according to Forrester research published in January, many of these organizations don’t actually have mature AI systems ready to replace those roles. The practice, dubbed “AI-washing,” is raising uncomfortable questions about whether tech’s favorite buzzword has become corporate America’s most convenient excuse for old-fashioned cost-cutting.
The numbers tell a striking story. Throughout 2025, more than 50,000 workers found themselves on the unemployment line with artificial intelligence listed as the culprit on their termination paperwork. Amazon trimmed staff. Pinterest made cuts. Dozens of other companies followed suit, each pointing to AI’s efficiency gains as the driving force behind workforce reductions.
But according to Forrester’s January report, there’s a problem with this narrative. “Many companies announcing A.I.-related layoffs do not have mature, vetted A.I. applications ready to fill those roles,” the research firm found. The gap between rhetoric and reality has birthed a new term in the corporate lexicon: AI-washing.
The phenomenon works like this – companies announce layoffs, cite AI transformation as the catalyst, and watch their stock prices hold steady or even rise. Investors love efficiency stories. They love automation narratives. What they don’t love is hearing that a business is struggling, that pandemic-era hiring sprees created bloated headcounts, or that revenue growth isn’t matching expenses.
“It’s a very investor-friendly message,” Molly Kinder, a senior research fellow at the Brookings Institute, told The New York Times. The alternative – admitting “the business is ailing” – doesn’t play nearly as well in earnings calls or press releases.