AI Cited in Most Job Cuts for Second Straight Month as Companies Report Major Productivity Gains

AI was the top reason companies cited for job cuts in April for the second consecutive month, according to Challenger, Gray & Christmas. The outplacement firm said AI has been cited in more than 49,000 job cuts so far this year. Block laid off 40 percent of its staff this year after determining that AI allowed it to do more with smaller teams.

Coinbase is reducing its staff by about 14 percent. Its CEO said Tuesday that AI is enabling engineers to ship in days what used to take a team weeks. Cloudflare reported its AI use has increased by more than 600 percent in the last three months.

The company said the way it operates has completely changed as a result. Microsoft surveyed 20,000 workers using AI across 10 countries and released a report about how AI is changing jobs last week. "The anxiety around AI at work is real—from fears of job loss to the pressure to keep up with rapidly evolving technology," Microsoft wrote in the report.

Most companies have not yet adjusted employee metrics and incentives to fit with how AI is changing work, the survey found. Alexis Krivkovich, a senior partner at McKinsey & Company who helps lead the company’s People and Organizational Performance Practice, said it is very few jobs that are actually entirely automated away by current AI technology.

AI is technically capable of automating 57 percent of work-related activities, according to McKinsey & Company research cited by Krivkovich.

That capability is spread across pieces and parts of various jobs rather than replacing entire positions. Nitin Seth, the cofounder of digital services and consulting firm Incedo, said his company helps clients boost productivity using AI by at least 20 percent to 25 percent without reducing staff at the same scale.

"You can’t take one quarter of Lisa, one quarter of Jessica, one quarter of Nitin and one quarter of somebody else and make it one person," Seth said.

Companies are using AI to automate certain parts of jobs and recalibrating existing roles around responsibilities that only humans can perform. The tech industry has been disrupted most by fears that AI will take jobs. Ninety percent of tech workers are using AI in their jobs, according to a Google survey conducted in September.

Stack Overflow found that 84 percent of respondents either use AI tools in the software development process or plan to. Boris Cherny, head of Claude Code at Anthropic, said a software engineer’s job involves much more than coding, including reviewing code, designing systems, troubleshooting and deciding what to build.

” Anthropic announced new AI agents built for financial work on Tuesday, including tools for building pitchbooks and crafting credit memos.

Cnn reported that these developments illustrate how AI models continue to evolve and take on more office tasks. Cnn reported that business leaders are figuring out what AI can and cannot do while thousands of jobs have been cut in the process. Dan Priest, PwC’s US chief AI officer, said it is possible there will be some job disruption on the horizon but he is not seeing mass layoffs at most companies or whole categories of jobs currently at risk.