Executives are increasingly citing AI as a reason for layoffs. Wall Street strategists say it may be too early to determine how much of it stems from genuine productivity gains versus the need to cut costs.<\/p>\n
\u201cI think there\u2019s some real displacement. I think you\u2019re also seeing executives use this as a good scapegoat for where they want to trim some of the fat,\u201d Winthrop Capital chief investment officer Adam Coons told Yahoo Finance last week, after crypto trading platform Coinbase (COIN<\/a>) announced plans to cut 14% of its workforce.<\/p>\n Invest in Gold <\/p>\n Powered by Money.com – Yahoo may earn commission from the links above. <\/p>\n CEO Brian Armstrong cited \u201ccurrent market conditions\u201d and a need to \u201coptimize the Company\u2019s operations for the AI era.\u201d Coinbase also wanted to get rid of manager layers.<\/p>\n Meanwhile, Cloudflare (NET<\/a>) announced a 20% workforce cut, affecting 1,100 workers. CEO Matthew Prince pointed to significant productivity gains from AI and autonomous agents, saying they made workers \u201ctwo, 10, even 100 times more productive than they had been before.\u201d<\/p>\n \u201cIt was like going from a manual to an electric screwdriver,\u201d said Prince, later pushing back on the idea that the company was trying to reduce costs.<\/p>\n \u201cThis isn’t a cost-cutting exercise or an assessment of individuals’ performance,\u201d he added.<\/p>\n Cloudflare joined a string of companies calling out AI as the reason for cuts.<\/p>\n Meta (META<\/a>) recently announced a headcount reduction to reallocate resources to AI <\/a>investments. Amazon (AMZN<\/a>) and Block (BLOCK<\/a>) also signaled that artificial intelligence reduced the need for workers.<\/p>\n Job cut announcements rose 38% in April,<\/a> driven largely by mounting tech layoffs, according to Challenger, Gray & Christmas. AI was cited as the top reason for the second straight month.<\/p>\n Still, US job growth continued to strengthen in April as the unemployment rate remained flat. That\u2019s mostly because of gains in areas such as healthcare, transportation and warehousing, and retail.<\/p>\n But Information employment \u2014 the BLS category used as a proxy for tech jobs \u2014 fell by 13,000.<\/a> The group is now down 342,000 jobs, or 11%, from its November 2022 peak.<\/p>\n