AI HAS STARTED A LAYOFF RACE (pt.3) “Oh, dear investors — look at me. I’m AI-native now!” AI is not just a work tool anymore. It is also a very profitable story to tell the market. A CEO says “AI,” cuts costs, and investors hear: smaller team, higher margins, faster growth. So yes: some layoffs may be happening faster than the technology itself has earned. Challenger tracked 112,713 announced U.S. job cuts that cited AI through July. But that does NOT mean 112,713 people were literally replaced by a chatbot. Even Challenger says the category is messy. In some cases, “AI” is a clear reason. In others, it is part of a broader restructuring — and a much better headline for investors than “we are cutting costs.” This is where the conversation gets silly. One side says: “Nothing is happening. AI is just a tool.” The other says: “AI has already destroyed the job market.” Both are lazy takes. What is already happening: — fewer entry-level openings; — fewer replacements when someone leaves; — lower prices for standardised knowledge work; — more pressure on people whose work is easy to describe, repeat, and measure. What we cannot honestly claim yet: — mass unemployment caused by AI; — a collapse in consumer demand; — every company becoming the next "Block" within a year. "Block" proves that one company can get smaller and make investors happy. The paper from my first post makes a much bigger claim: what happens if everyone does it? We are not there yet. In Q2, U.S. consumer spending still grew. A measure of demand from households and businesses rose 3.9% annualised. Payrolls fell by 23,000 in July — a real sign of a softer labour market, but not proof of an AI depression. That is the uncomfortable place we are in: the first cracks are visible, but the collapse is not. And that makes the next question even more interesting: Next: Can this AI boom actually pay for itself — or is “AI-native” mostly an expensive investor story?