Summary
- Roughly a quarter of US layoffs announced in April 2026 cited AI adoption as the reason, but OpenAI's Sam Altman and an MIT professor both dismissed the claim as "AI washing"
- The column argues that at-will employment, health coverage that ends the day you're fired, and broken remote-work promises make layoffs feel less like business decisions and more like abandonment
- With the CEO-to-worker pay gap now at 281 times, Gallup found trust in big business sitting at a record-low 17%, while new business formation has climbed 50% above pre-pandemic levels
Lori Janke's column for Fortune takes direct aim at the practice of American companies pointing to generative AI as the reason for layoffs. In April 2026 alone, about a quarter of announced US corporate layoffs cited AI adoption as the cause — making it the most commonly cited reason for the second month running.
The column's starting point is that even the people building AI are pushing back on this explanation. OpenAI's Sam Altman has called the practice "AI washing," and MIT professor Paul Osterman described it as "the perfect excuse to justify mass layoffs." In a Forrester survey, 55% of leaders who had cut staff citing AI later admitted it was a mistake.
Companies broke the promise first
The column starts with the basic structure of American employment. Most US jobs are at-will, meaning a company can end the relationship for almost any reason, without notice, and without any legally required severance. Health insurance works the same way — there's no 30-day grace period, Janke notes. Coverage simply ends on the day you're laid off.
To put that in concrete terms: if you want to keep that coverage as an individual, you use COBRA, which means paying the full premium yourself with no employer subsidy. According to Kaiser Family Foundation data, average annual COBRA premiums for a family in 2025 ran about $27,000 — roughly $2,250 a month. If that bill lands while someone is undergoing cancer treatment or caring for a sick child, a layoff stops feeling like a business decision and starts feeling like abandonment, the column argues.
A 2024 survey found that 8 in 10 leaders admitted using the label "layoff" when what they really meant was pushing out an employee they wanted gone, and 54% said they used the term specifically to avoid paying severance. In Janke's view, AI is simply the newest excuse added to that same list.
Remote-work promises got reversed too
The column also looks at people who were hired with remote-work arrangements, only to later face return-to-office mandates or "relocate or resign" ultimatums. Amazon rolled hundreds of thousands of employees back to five-day-a-week office attendance, and Starbucks told headquarters leaders to move to Seattle or Toronto within a year or leave the company. The stated justification was always the same: in-person work improves performance.
Research out of the University of Pittsburgh, which analyzed return-to-office mandates at large public companies, found otherwise. Financial performance didn't improve — only employee satisfaction dropped. Wharton's Adam Grant put it bluntly, saying leaders shouldn't "mistake visibility for productivity."
What the numbers show
The pay gap is where the column presses hardest. The average CEO at a large company now earns about 281 times what a typical worker makes — and at Starbucks last year, that gap reportedly hit 6,666 times. Since 1978, CEO pay has risen more than 1,000%, while worker pay over the same period has grown just 24%.
| Category | Increase since 1978 |
|---|---|
| CEO pay | 1,000%+ |
| Worker pay | 24% |
The column also cites Meta, which laid off about 3,600 employees classified as "low performers" in early 2025 — and roughly a week later raised executive bonus targets from 75% of salary to 200%. It's a striking illustration of how the pain of layoffs and the gains from compensation don't move in the same direction.
Gen Z is already choosing a different path
A 2026 Gallup poll found that only 17% of Americans said they actually trust big business — near a record low. Among adults under 35, nearly half said they view socialism favorably. Janke shares an anecdote about a friend's son who is, in her words, "half-jokingly, half-fearfully becoming a full-blown socialist" — a line meant to capture the mood.
And this generation isn't just watching from the sidelines. More than 5.5 million new business registrations were filed in the US in 2023, and the pace has held up since then, keeping new business formation roughly 50% above pre-pandemic levels. Nearly 4 in 10 recent college graduates say they'd rather start their own business than climb someone else's ladder.
In a related vein, METAL LAB previously covered a warning that cutting entry-level hires for AI could drain expertise pipelines by the 2030s — another angle on who ends up paying the cost when companies optimize for short-term efficiency.
Editor's take
What makes this column interesting is that it treats AI not as the cause of layoffs but as the excuse for them. The fact that OpenAI's own leadership and labor economists land on the same conclusion makes it hard to take "AI is eliminating jobs" headlines at face value. What's actually happening looks more like ordinary restructuring dressed up with whatever label sounds most convincing at the moment.
The generational split here is stark. People who entered the workforce in the early-to-mid 2000s tended to treat layoffs as exceptional events. People starting careers in the 2020s increasingly factor layoffs into their planning as an expected risk. Watch remote-work promises get reversed, health coverage vanish the day you're fired, and executive bonuses rise a week after layoffs are announced enough times, and loyalty to an employer starts to look like the irrational choice.
This trend isn't just an American story — it matters for companies and teams elsewhere too. If layoffs are increasingly being explained as "AI adoption," it's worth checking whether that explanation actually lines up with the financial data. And when job postings promise working conditions that don't match actual policy, that gap eventually shows up in turnover and employer reputation. When designing compensation structures, it's also worth paying attention to timing — making sure layoffs and executive bonuses don't move in opposite directions within the same quarter.
Expect more data over the coming months to sharpen this trust gap. The share of companies citing AI in layoff announcements and the number of new business filings both look likely to keep climbing side by side. The more entrenched the perception becomes that companies broke the deal first, the more talented people will simply leave quietly — or skip the job search altogether and start building something of their own.
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