
Paul Osterman
Professor at MIT Sloan School of Management and expert on labour economics and workforce policy; argued that AI attribution in layoff announcements continues a decades-long pattern of technology as a cover for planned restructuring.
Paul Osterman told Fortune on 31 May that AI attribution in corporate layoffs is largely a cover story, citing Harvard Business Review research finding only 2% of layoffs at AI-citing firms followed an actual AI deployment.
Last refreshed: 17 July 2026 · Appears in 1 active topic
Is AI really causing mass layoffs, or is it the cover story for cuts firms already planned?
Timeline for Paul Osterman
Mentioned in: Cook's July text drops the bond spreads
AI: Jobs, Power & MoneyMentioned in: Ford and IBM start undoing AI cuts
AI: Jobs, Power & MoneyMentioned in: AI cuts hit record 38,579 in May
AI: Jobs, Power & MoneyTold Fortune that AI attribution is largely a cover story for planned layoffs, citing a 20-year pattern
AI: Jobs, Power & Money: MIT economist: AI layoffs are a cover storyMentioned in: The AI layoffs nobody is counting
AI: Jobs, Power & MoneyBackground
Paul Osterman is a professor at the MIT Sloan School of Management and one of the United States' leading labour economists, with an academic career spanning more than four decades of research into internal labour markets, job quality and workforce policy.
He is the author of several influential books, including Securing Prosperity and Good Jobs America, and has served on National Academy of Sciences committees examining the future of work, as well as advising the US Department of Labor and congressional committees on workforce policy. His work on how firms structure careers, wage ladders and job security internally has become foundational to understanding why external shocks, technology, offshoring, automation, translate into workforce disruption differently across industries and firm types.
That grounding is what gives his more recent scepticism about AI-attributed layoffs its weight: rather than a one-off comment, it extends a career-long argument that employers reach for whichever technological narrative is most convenient when explaining decisions made for other reasons.
He argues AI masks pre-planned layoffs
On 31 May 2026, Paul Osterman told Fortune that AI attribution in corporate layoff announcements is largely a cover story, arguing firms have used successive waves of technology as an excuse for planned restructuring for at least two decades . He pointed to Harvard Business Review research finding that only 2% of layoffs at AI-citing companies followed a demonstrable AI deployment, a figure now used as a benchmark for scepticism about employer claims.
Subsequent developments have tended to run alongside his thesis rather than against it: reversals at Ford and IBM by 1 July, where automation had to be undone and rehiring resumed, read as evidence that cuts outran what the technology could actually deliver, the exact pattern Osterman had named in May.