AI-Linked Layoffs Are Not Lifting Stock Prices

CNBC reported Sunday that companies announcing workforce cuts tied to artificial intelligence have largely failed to impress shareholders, with more than half seeing their stock prices fall afterward.

The Numbers Tell an Uncomfortable Story

CNBC examined 23 S&P 500 companies across various sectors that explicitly connected layoffs to AI adoption. As of May 15, thirteen of those firms — roughly 56% — were trading lower than when their job cuts were announced. Among those whose shares declined, the average drop was approximately 25%.

The findings challenge a popular assumption that AI-driven efficiency gains translate cleanly into shareholder value.

High-Profile Casualties of the AI Layoff Wave

Several well-known names feature among the worst performers. Footwear brand Nike eliminated close to 800 distribution roles in January, citing plans to accelerate automation. Its shares have fallen nearly 35% since that announcement. Customer relationship management giant Salesforce cut roughly 4,000 positions last September, pointing to its AI-powered Agentforce platform as a partial replacement for support staff. Its stock has dropped around 32% over the same period.

Freelance marketplace Fiverr took the steepest hit. After slashing 30% of its workforce to pursue what its CEO described as an AI-first operating model, the company’s shares have plummeted roughly 54%.

Why Markets Remain Skeptical

Daniel Keum, associate professor of management at Columbia Business School, told CNBC that investor uncertainty runs deep. He described AI as a “macro shock” whose medium- and long-term effects remain poorly understood.

Keum also pointed to a structural problem with the productivity argument. When every competitor adopts the same cost-cutting technology simultaneously, no single company gains a lasting edge. The competitive baseline simply shifts, leaving profit margins largely unchanged.

A separate concern centres on credibility. Ally Warson, a partner at AI-focused venture capital firm UP.Partners, told CNBC that investors are increasingly alert to “AI washing” — the practice of framing conventional cost cuts as technology-driven transformation to capitalise on positive market sentiment around AI.

Background: A Growing Job-Loss Toll

Layoffs linked to AI adoption are accelerating broadly. One widely cited estimate puts AI-related job losses above 112,000 since the start of 2025. A November study from the Massachusetts Institute of Technology suggested AI can already perform work done by nearly 12% of the U.S. labour market, representing potential wage savings of up to $1.2 trillion across multiple industries.

Still, macro pressures complicate the picture. Keum noted that geopolitical turbulence and broader economic uncertainty make it difficult to isolate AI’s true contribution to any company’s stock performance.

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