Meta · Nation Thailand
AI layoff trap raises wider risks for workers, firms and demand
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Artificial intelligence , or AI , is sending another tremor through the economy as organisations around the world continue to cut jobs and adopt AI to replace workers and reduce costs.
Key facts
- But when workers are laid off and lose income, consumer purchasing power also falls, affecting sales of goods and services across the wider economy.
- LinkedIn is preparing to cut 5% of its workforce, or about 875 people, while Coinbase , Cloudflare , ClickUp and Wix have all announced workforce reductions and clearly signalled adaptation to the AI era.
- Since the launch of ChatGPT in late 2025, technology companies around the world have poured huge budgets into developing AI models, while businesses have begun experimenting with AI across many areas of work, from customer service,
- US data also show that in 2025, there were more than one million layoffs, with about 55,000 positions directly linked to the adoption of AI.
- Meanwhile, layoffs in the US technology sector in 2026 are continuing, with the total now above 150,000 positions.
- pace, with more than 245,000 technology employees laid off throughout 2025.
Summary
But when workers are laid off and lose income, consumer purchasing power also falls, affecting sales of goods and services across the wider economy.
The study, The AI Layoff Trap, or the “ AI layoff trap ”, indicates that while AI can raise productivity and reduce costs for businesses, broad labour replacement may cause people’s income and purchasing power to decline, creating a new risk that affects not only workers but also businesses and the economy as a whole.