Redrawing the Org Chart with AI
- Rajib Ghosh
- Aug 5
- 5 min read
Lately, it feels like every second headline on the internet is either about AI… or job cuts. And in between those headlines are real people — friends, colleagues, former teammates — reaching out, looking for clarity, connection, or simply someone to talk to about their careers and what’s next.
Specially over the past few months, I’ve seen more people I know reaching out to me as they are being asked to "choose to leave" — than at any point in recent memory. Some are even choosing to leave without being asked. They are rethinking whats next and what is their purpose. Although I learn a lot through these conversations, it got me thinking:
Why are companies cutting jobs at this pace?
Because here’s what we know:
AI, for all the hype, isn’t mature enough to replace most jobs.
And despite all the investment, the promised AI-driven efficiency hasn’t kicked in at the scale we’re seeing these layoffs.
So what else is really going on?
I took some time to dig deeper. I looked beyond the headlines, across sectors and regions, and tried to understand what’s actually driving this wave of job cuts.
Here are 6 things I think might be going on
The Over-hiring Hangover
Let’s rewind to 2020. The world went remote, everything moved online, and companies — especially in tech — hired like there was no tomorrow.
Meta nearly doubled its workforce during the pandemic.
Amazon added over 800,000 new roles.
Countless startups scaled teams aggressively, expecting the growth to last forever.
But as the world reopened, demand stabilized. And what once looked like proactive growth now looked like overreach. The result? Mass layoffs across sectors. A painful correction.
The New Rules of Capital
While I may not be very knowledgeable about this topic, I understand that in the years of low interest rates and cheap capital, companies could afford to chase growth without worrying too much about efficiency. Those days are gone.
With interest rates up and investor expectations shifting, profitability is the new mandate.
That means cutting costs fast. And the largest cost in most companies? People.
Even healthy companies are shedding jobs — not because they’re in trouble, but because they’re playing by a new financial rulebook.
The AI Bet (Before the Payoff)
Now here’s where AI does enter the picture — but not how most people assume.
Most companies aren’t replacing thousands of people with AI tools.
Instead, they’re reallocating budgets — cutting legacy roles so they can fund their AI future.
Take Microsoft: it laid off 10,000 people in early 2023… and invested billions in OpenAI and AI infrastructure that same quarter. Meta, Amazon, and others followed similar patterns.
But here’s the reality check for now:
Most companies aren’t yet seeing meaningful returns on their AI investments.
60% expect less than 50% ROI from AI in the short term.
Fewer than 3% expect high ROI (>100%) anytime soon.
And here’s what’s even more telling:
Only about 1 in 4 companies have managed to move beyond AI pilots into scaled deployment.
Many are still struggling with data quality, integration, security, and talent gaps — which means AI adoption, in practice, is still quite low relative to the buzz it’s generating.
So in many cases, people are being let go before the technology is ready to take their place — because companies are betting on AI, not benefitting from it (yet).
Restructuring for Speed and Simplicity
Another big theme? Organizational flattening.
Companies are trimming layers — especially middle management and support roles — in the name of agility.
Meta explicitly said it was “removing layers of management” in its restructuring.
Citigroup eliminated entire tiers of leadership and over 35 internal committees.
Recruiting, HR, and program management roles have been among the hardest hit — not because they failed, but because the hiring and project velocity of the past few years has slowed.
This isn’t just about cost-cutting. It’s about control. Speed. Simplification.
Automation + Offshoring = Quiet Redesign
Not everything is about AI. Some changes are more subtle — or have been happening for years.
Routine jobs are quietly being automated through robotics, scripts, and process tools.
Work is being offshored to lower-cost markets where global collaboration is now the norm.
So a support center in California shuts down — and a new team in Manila or Bengaluru comes up. Not headline-grabbing. But impactful.
And while these decisions are often framed as “efficiency,” they also reshape teams and cultures in ways we don’t fully talk about.
Mergers, Consolidations, and Redundancy Cuts
In industries like finance, telecom, and media, we’re seeing another story play out: consolidation.
UBS’s takeover of Credit Suisse led to over 10,000 layoffs globally.
Big tech mergers lead to overlapping teams — and inevitable restructuring.
In retail and automotive, store closures and plant rationalizations follow the same logic.
These cuts aren’t always technically about performance. Sometimes they’re just the math of “synergy.”
So… is AI taking the jobs?
Yes — but not at the scale the headlines suggest.
Roughly 10,000 layoffs in the U.S. this year have been directly attributed to AI.
That’s a fraction of the overall numbers.
What’s happening more often is this:
AI is the narrative companies use to justify a reorganization.
It’s a convenient future story — even when the technology hasn’t caught up.
What this means for all of us
This isn’t just a layoff wave. It’s a shift in how organizations are built, funded, and led.
The roles being cut are often those seen as duplicative, slower, or easier to automate.
The roles being protected or created are closer to value delivery — product, AI, growth, risk, compliance.
If you’re navigating this moment — whether you’re in leadership or in transition — here’s what I’d offer:
Stay close to people. These conversations matter more than ever.
Stay adaptable. Skills that work with AI are growing more valuable by the day.
Stay human. No algorithm can replace that — not yet.
The world of work is being rebuilt. Not with one big shift, but thousands of smaller ones.
Some of them will be empowering.
Some will be painful.
But all of them are changing what it means to be part of a modern organization.
Let’s keep talking about it — with honesty, empathy, and perspective.
References and Credits
Empowering People to Unlock AI’s Potential at Work – McKinsey
Layoffs by Cause: Automation, Restructuring, Economics – WSJ & ITPro, ITPro
Cover Image: Midjourney
AI Assisted
Insightful and elegantly reasoned.