Analysts describe a bandwagon dynamic in corporate cuts where firms trim headcount to match peers and signal efficiency, while labor experts warn AI’s impact on overall headcount may be less dramatic than feared and job reallocation across sectors is possible as automation expands.

The role of AI is nuanced: although automation can drive cost savings, there is little evidence that AI replacement is driving the bulk of recent layoffs, and experts say cutting headcount for AI is often more complex than it appears.

A wave of large-scale white-collar layoffs hits major U.S. firms in 2025, with Amazon, UPS, and Target announcing combined cuts totaling more than 60,000 roles.

Corporate America is contending with substantial white-collar job cuts this year across Amazon, UPS, Target and others, prompting questions about AI’s role and the health of the labor market amid a government shutdown.

Target is eliminating about 1,800 corporate roles to reduce complexity, speed decision-making, and cut costs amid sluggish consumer spending and tariff pressures, while speeding up technology adoption and streamlined operations.

Amazon’s 2025 layoff round—approximately 14,000 roles—seeks to slash bureaucracy and run more like a startup, with AI investments offset by overhead cuts; leadership says future reductions focus on efficiency, not instant AI replacement.

The broad implications may mark a turning point for the economy and labor market, signaling a shift from customer-facing to back-office roles and a trend toward leaner, more automated corporate structures across retail, logistics, and tech.

The layoffs unfold amid inflation, high tariffs, rising delinquencies, and tepid consumer demand, contributing to views of slower growth even as AI-driven investments buoy stock markets.

Executives frame the layoffs as trimming corporate bloat, boosting efficiency, and adapting to new business models, not solely AI adoption.

The government shutdown prevents the Bureau of Labor Statistics monthly jobs report, complicating real-time assessments of the labor market and any AI-driven recession risk.

Examples like Klarna’s ~40% headcount reduction via AI efficiencies and Duolingo eliminating contractors for AI-handled work illustrate AI-enabled cost-cutting trends in specific sectors.

AI is cited as a contributing factor in some companies’ workforce reductions, with explicit references to AI-driven changes in personnel.

UPS’s strategy focuses on reducing dependence on its Amazon relationship and shifting toward higher-margin, lower-labor businesses; about 48,000 roles have been cut in 2025, largely tied to store closures and efficiency drives rather than automation alone.