Title: MIT Professor: CEOs Use AI as a Decade-Old Excuse for Workforce Reductions

While several technology firms have recently pointed to artificial intelligence as the catalyst for significant staff reductions, an expert from MIT suggests this narrative is part of a long-standing corporate strategy to mask deeper operational shifts. According to Paul Osterman, a professor emeritus of human resources management at the MIT Sloan School of Management, executives have been utilizing this justification for approximately two decades.

The trend gained momentum late last week when Wix, an Israel-based website creation firm, joined a growing list of tech companies announcing job cuts driven by AI. Avishai Abrahami, Wix’s CEO, revealed via a post on X that the company would eliminate approximately 20% of its workforce. Based on a May filing with the Securities and Exchange Commission, which listed 5,277 employees, this translates to just over 1,000 positions.

In his announcement, Abrahami highlighted two primary factors: the financial pressure exerted by the strengthening Israeli shekel against the U.S. dollar, and the imperative to adapt to the rapid evolution of AI. He described AI as "the most significant shift in how companies are built since the invention of modern programming languages in the 1970s," emphasizing the need to transform Wix into a "faster, leaner, and flatter organization." When contacted for further details, a Wix spokesperson directed Fortune to Abrahami’s initial statement.

Abrahami’s rhetoric mirrors similar statements from other industry leaders. Earlier this year, Block CEO Jack Dorsey announced the elimination of 4,000 roles to establish "smaller and flat" teams and introduce a "new way of working." Executives at Snap and Atlassian have employed comparable language in their own restructuring efforts.

However, the push for streamlined teams and heightened productivity is not a novel concept. "They’ve been saying that for 20 years," Osterman noted. He argues that while AI does create genuine pressure for innovation and structural change, many corporations are primarily using it as a veil for workforce reductions—a practice Osterman terms "AI washing." This strategy allows firms to reframe what is typically negative news into a positive narrative of technological advancement.

This approach can yield tangible financial benefits. Following Cisco’s announcement this month that it would cut 4,000 jobs, its stock price surged by 13%. "AI is a perfect excuse to justify big layoffs," Osterman told Fortune. "It makes it seem as if it’s not our decision, our fault—it’s the technology."

Osterman pointed out that this tactic is not unprecedented; companies have long used economic downturns as a convenient pretext for terminating employees they intended to let go regardless. Furthermore, he connected the current wave of AI-related cuts to the rise of "disposable workers," a segment he estimates now constitutes 35% of the American labor force. In this context, the reluctance of some companies to hire more staff represents a new admission of a long-existing reality.

Source: Yahoo News Generated at: 2026-06-02 10:41:29 UTC