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So… about yesterday’s market.

After a week that felt held together with tape, Friday snapped back hard.

The Dow ripped past 50,000 for the first time ever.
The S&P 500 jumped nearly 2%. The Nasdaq followed.

Big Tech led the bounce — Nvidia +8%, Broadcom up big, Tesla higher — even as Amazon sank on plans to spend even more on AI.

Crypto bounced too: Bitcoin climbed back above $70K after plumbing 16-month lows. Strategy (MSTR) whipsawed, then finished sharply higher.

On paper, it looked like “risk is back.”
Underneath, it felt more like relief than conviction.

While markets were whipsawing, layoffs were hitting the worst January since 2009 — and many of them were explicitly tied to “AI.”

And here’s the disconnect.

Markets are trying to price an AI boom…
while companies are cutting people in the name of AI.

Which brings us to today’s story.

The Narrative:

In 2023–2024, that story was:
AI was inevitable. Spending was virtuous. Markets rewarded ambition.

Boards signed off. CFOs loosened the purse strings. Investors applauded louder with every new data center and every bigger CapEx number.

It was clean, simple, and comforting.

Then 2025-2026 arrived — and the narrative shifted.

Now the headline version is different:
AI is “eliminating jobs.”

You see it everywhere. It has become the neat, modern explanation for why tens of thousands of people are losing work.

But here’s the tension that doesn’t make the headlines:

If AI is truly replacing workers at scale…
you should see it clearly in productivity and profits.

Right now, you don’t.

So something doesn’t quite line up.

If you just read the headlines, the story sounds simple:

AI is here.
Jobs are disappearing.

Last month, Challenger, Gray & Christmas put a number on it:

Nearly 55,000 U.S. job cuts in 2025 were officially attributed to AI —
a 13× jump from when they first started tracking that category.

Corporate America leaned into that language:

• Pinterest trimmed ~15% of staff, citing an “AI-forward approach.”

• Dow Chemical announced 4,500 cuts while leaning into “AI and automation.”

• Amazon cut 16,000 jobs, extending last year’s reductions.

• Microsoft, Meta, and Salesforce all linked layoffs to “AI-driven efficiency.”

If you stopped there, you’d think the robots are already running the show.

But that’s where the story gets slippery.

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Oxford Economics looked at the same data… and came back with a very different read.

Their January report basically said:
AI probably isn’t killing jobs the way headlines suggest.

Why? Because if AI were actually replacing workers at scale, you’d expect a clear jump in productivity.

You don’t see that.

Their implication is blunt: Saying “AI did this” sounds better to investors than admitting weak demand or pandemic-era overhiring.

Yale’s Budget Lab backed that up.
Their analysis found that employment patterns still look mostly like they did before the AI boom — not like a labor market being radically reshaped by machines.

A December Harvard Business Review survey of 1,000+ executives showed exactly that:

• 60% have already reduced headcount in anticipation of AI

• 29% slowed hiring for the same reason

• Only 2% said they made large layoffs tied to actual AI implementation

So why is AI dominating layoff headlines?

Plain English: Most “AI layoffs” aren’t about AI replacing people.
They’re about expectations — and budgets.

1 The Uncomfortable Math

An MIT study later found something brutal:

Of companies investing heavily in AI… 95% saw zero measurable profit impact.

Billions spent. Almost nothing to show for it — yet.

So if AI isn’t actually replacing workers at scale…
why are companies firing people and blaming it?

Because “AI transformation” is a beautiful story for Wall Street.

Much cleaner than: “We overhired in 2021 and need to shrink now.”

2 The Companies Getting Caught

A few examples show how messy this really is.

Salesforce $CRM ( ▲ 0.73% ) cut 4,000 customer support jobs, saying AI could do “50% of the work.”
Later, a spokesperson admitted hundreds were simply redeployed elsewhere — not replaced by AI.

Klarna $KLAR ( ▲ 0.84% ) became the poster child for AI job replacement after cutting 40% of staff.
Then the CEO clarified:
“We have made 0 layoffs due to AI.”
Most cuts were due to slowing hiring after 2023.

Hold that thought…
IBM and Klarna later reversed some AI customer-service bets after discovering the tech couldn’t handle real-world complexity.

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3 What the Data Actually Shows

Yale’s Budget Lab analyzed U.S. labor data from 2022–2025.

Their conclusion:
AI has not caused widespread job destruction so far.

The disruption is far smaller than earlier tech waves like computers or the internet.

Instead, what we’re seeing looks more like:

→ Pandemic overhiring
→ Higher interest rates
→ Corporate belt-tightening

And … AI as the convenient excuse.

Entry-level workers are the ones catching it.

Between 2022 and 2025, opportunities for 22–25-year-olds in “AI-exposed” fields fell about 13% relative to trend.

Not because companies staged mass layoffs or because AI replaced entire roles overnight.

Because firms simply stopped backfilling junior jobs… fewer openings… period.

That’s what economists call soft attrition.
What workers feel is simpler: doors slowly closing.

And the consequences compound:

• Fewer first jobs to break in

• More work piling onto the remaining staff

• Less training and mentorship for young talent

Bottom line:
The entry ladder got a lot steeper.

… what’s really happening

Here’s the clean version.

AI isn’t marching through offices firing people by itself.
Layoffs aren’t a robot revolt.

They’re a budget reset wrapped in a tech story.

Companies overhired in the boom years.
Rates went up. Growth slowed.
The bills came due.

And “AI transformation” turned out to be the perfect cover.

✓ It sounds futuristic.
✓ It sounds strategic.
✓ It sounds inevitable.

It also sounds a lot better than:
“We staffed like it was 2021 and now we need to unwind it.”

That doesn’t mean AI is fake.
It means its impact is still ahead of its footprint.

Right now, AI is mostly a spending story, not a productivity story.
A narrative story, not a labor-market story.
A CapEx story, not a cash-flow story.

The irony?

The people who feel this the most aren’t executives or shareholders.
They’re the youngest workers — the ones who never got their first shot.

And that’s the AI-layoff loophole.

A budgeting problem — wearing an AI hoodie.

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