Layoffs Surge, Labor Market Cools: American Workers on the Frontline of the AI Transition
As major U.S. companies slash thousands of jobs even while investing billions in artificial-intelligence projects, everyday workers are facing a shifting labour market. From tech engineers to non-tech staff, survivors are being asked to adapt fast—while millions wonder if their next job will exist at all.
When job cuts meet job growth: the strange new American labour market
In a headline move, Amazon announced it will eliminate approximately 14,000 corporate jobs—about 4% of its corporate workforce—while ramping up investment in artificial intelligence.
Meanwhile, new government data shows hiring is decelerating and major employers are rethinking staffing models. The labour-market loop of 2025 increasingly looks like this: high growth in AI and specialist tech roles coexisting with widespread cuts in other sectors.
The human cost of the transition
For many American workers, the message is clear: you need to move fast, upskill, or risk being left behind.
- Employees at large corporations were given 90 days to find new internal roles or accept severance.
- Layoffs are no longer limited to entry-level or non-technical workers—mid-career roles in marketing, operations and even engineering are being reshaped.
- Workers in non-tech fields face slower rebound; many must pivot to adjacent functions like data-ops or prompt engineering just to stay relevant.
Why layoffs are accelerating even with strong companies
Several forces are converging:
- AI substitution and productivity leap: Automation is starting to bite into corporate head-counts in areas like content review, marketing operations, compliance and design.
- Cost pressures and margins: With higher interest rates and slowing consumer demand, businesses are pruning staff to safeguard profitability even as they invest in growth engines.
- Labour supply friction: As companies reduce hiring for standard roles, they increasingly rely on high-end talent, creating a two-tier workforce of “survivors” and “sunset” workers.
What it means for everyday Americans
While the broader unemployment rate remains near 4.3%, the data masks deeper fractures.
- Many workers are relying on contract roles, gig income and retraining programmes rather than secure full-time employment.
- Graduate job listings for entry-level corporate roles have dropped significantly, making it harder for younger Americans to launch careers.
- Job-seekers must increasingly position for AI-adjacent skill sets—not just coding, but data interpretation, system orchestration and hybrid roles.
The eSNAP index reflects mounting risk
As of today, the eSNAP Economic Health Index remains at 65/100 (Moderate Risk) with a downward drift in the Household Fragility component.
- Growth: 76
- Employment: 70
- Innovation/AI: 85
- Household Fragility: 47
While innovation scores are high (reflecting investment in AI), labour and household metrics are showing early signs of strain—an imbalance the eSNAP dashboard flags as a key risk.
Looking ahead: what workers should know
- Upskill now: Workers in roles vulnerable to automation should consider learning data-ops, AI workflow management, prompt engineering and related skills to stay ahead.
- Diversify income: Those affected by cuts should explore remote freelance roles, project-based work and part-time assignments while transitioning.
- Governance matters: At the policy level, stronger retraining programmes and support for displaced workers will be critical if the shift continues.
In short: The U.S. labour market isn’t collapsing—but it is reshaping rapidly. Workers who adapt may thrive; those left behind may struggle. That duality is creating a labour landscape where strength and vulnerability coexist—often in the same industry, the same city, the same household.