New job numbers paint a sobering picture of the U.S. labor market as 2025 comes to an end.
Employers announced more than 1.1 million job cuts through November, the highest year-to-date level since 2020, according to a new report from global outplacement firm Challenger, Gray & Christmas.
Buried in the broader economic restructuring is a specific, growing trend that demands attention: layoffs attributed to artificial intelligence.
In just the month of November, employers cited AI as the reason for 6,280 job cuts. That brings the total number of AI-attributed layoffs to 54,694 this year (2025).
Though a fraction of total job cut numbers, they represent a growing segment of job losses. To examine these numbers and what they could mean for the future of work, I spoke with SmarterX and Marketing AI Institute founder and CEO Paul Roetzer on Episode 184 of The Artificial Intelligence Show.
The Numbers Tell Just Part of the Story
The report highlights that the technology sector continues to lead private-sector employee reductions, with more than 153,000 total cuts for the year. Restructuring and market conditions remain the top cited reasons for layoffs, but the news that companies are now putting specific numbers to AI displacement is a critical development.
Roetzer believes the official numbers probably underestimate the true scale of what is happening inside businesses.
“I think it’s underreported, honestly,” says Roetzer.
Companies are quietly reshaping their workforces to be leaner and more efficient, often without labeling every move as an "AI layoff." But more and more, leadership is prioritizing teams that can leverage these tools to do more with less.
The Squeeze on Entry-Level and Middle Management
One of the most pressing questions that emerges from this data is: Who is at risk of losing their job? Is it the entry-level workers whose tasks are easily automated, or the middle managers whose coordination roles are becoming obsolete?
Roetzer argues that right now, we are seeing a direct impact on entry-level roles. Even though younger workers are often considered "AI native," that familiarity with technology doesn't necessarily translate to business value in an AI-first world.
“They lack the business experience, instinct, and context to ask the right questions of the AI assistance and to know what to do with the answers,” says Roetzer.
But the pressure is moving up the ladder to middle management.
Roetzer suggests that over the next three to five years, middle managers who lack high-level strategic abilities will find themselves increasingly vulnerable. In the future, companies might not need layers of humans when a single, AI-literate leader can orchestrate the output of an entire department.
“One senior leader with strong strategic abilities and high AI literacy will be 10 to a hundred times more productive and impactful,” Roetzer explains. “I think as AI agents become more autonomous and reliable, we see a strong distribution of senior leaders plus AI agents, plus entry level with very little middle management.”
A Reality Check for 2026
No matter who’s affected, the labor market suggests turbulence.
The transition to an AI-integrated economy is not going to be seamless, and Roetzer warns that we need to be realistic about the challenges that lie ahead, particularly for those entering the workforce.
“I think people have to understand 2026 is not going to be easy when it comes to this stuff,” says Roetzer. “There are indications, there’s things I have seen and heard, that tell me we are in for way more AI-affected layoffs.”
This is likely to be especially pertinent for the education sector and for families with students currently in college. The traditional entry-level pathways are eroding, and finding work next summer could be significantly harder than in previous cycles.
The Way Up: Growth and Innovation
Despite the difficult forecast, the solution isn't to pause or retreat.
Roetzer emphasizes that the only viable path forward for individuals and organizations is to lean into growth, innovation, and entrepreneurship. We have to create new value to replace what is being automated away.
“Growth and innovation are the answer,” says Roetzer. “Entrepreneurship is the answer. We have to create more opportunities.”
For business leaders and employees, this means continuing to prioritize AI literacy, adaptability, and the human skills such as curiosity and critical thinking that the machines can't replicate.
Mike Kaput
As Chief Content Officer, Mike Kaput uses content marketing, marketing strategy, and marketing technology to grow and scale traffic, leads, and revenue for Marketing AI Institute. Mike is the co-author of Marketing Artificial Intelligence: AI, Marketing and the Future of Business (Matt Holt Books, 2022). See Mike's full bio.