Same Old Layoffs, Brand New Excuse

Two weeks ago I wrote about Sam Altman's very convenient distinction: his warning that companies were engaging in 'AI washing' while his own technology enabled the very layoffs he claimed to deplore. The distinction, I argued, was a smokescreen. Now along comes Cognizant to prove the point beyond any reasonable doubt. The IT services giant is reportedly preparing to cut around five percent of its workforce — mostly in India — and has helpfully labelled the exercise an 'AI-led restructuring.' Which is corporate for: we are firing people and using the shiny new technology as both the justification and the shield.

Let us parse this phrase, 'AI-led restructuring.' It implies a kind of inevitability, as though artificial intelligence had independently decided that Cognizant's headcount was excessive and had issued a directive. In reality, senior management has made a commercial choice: they believe they can replace some human labour with software, and they are framing that choice as a technocratic necessity rather than a cost-cutting decision. The language is borrowed from the playbook of every downsizing wave since the 1980s. 'Restructuring' once meant 'reorganisation for efficiency'; it now means 'we are sacking people and we would prefer you not to dwell on that.' The addition of 'AI-led' simply updates the excuse for the current hype cycle.

Cognizant is not alone, of course. This week Coinbase announced it would cut fourteen percent of its workforce, with CEO Brian Armstrong declaring that 'pure managers' — those without direct technical or product responsibilities — were obsolete because AI now handles performance reviews and resource allocation. The implication is that the bots are better at bossing people around than actual bosses. Perhaps that is true; the bar is not high. But the framing is what matters. Both companies claim they are not simply slimming down; they are being *transformed* by AI. It is a narrative that allows executives to appear forward-looking while doing something as ancient as firing workers to satisfy shareholders.

The real cynicism lies in where the cuts fall. Cognizant's restructuring is expected to hit its Indian workforce hardest, which is the same pattern we saw last year when tech firms outsourced layoffs to low-cost locations after over-hiring during the pandemic. India's IT sector has long been the back office of global capitalism, and it is now bearing the brunt of a transition that executives frame as technological progress. Notice how rarely Silicon Valley CEOs announce that *their own* jobs are being 'AI-led restructured.' Funny that.

Altman, in his Fortune interview, specifically warned against the 'AI washing' that occurs when companies attribute mundane changes to artificial intelligence. He was right to warn — but he also runs a company whose technology is being used precisely to justify such washing. The distinction he drew between genuine AI integration and mere rebranding is intellectually honest, but it is also strategically useless. As long as there is a market incentive to call every round of redundancies an 'AI-led restructuring,' companies will do exactly that. Altman can wring his hands all the way to the bank.

What is to be done? Not much, probably. The task force that the UK government is creating to examine labelling for AI-generated content is a worthy endeavour, but it will not stop companies from using the label 'AI-led' as a euphemism for mass layoffs. That would require a different kind of regulation — one that forces employers to demonstrate that AI is *actually* replacing the specific roles being cut, rather than just providing cover for a headcount reduction already planned. Do not hold your breath.

In the meantime, every time you see a press release about an 'AI-led restructuring,' translate it into plain English: 'We are firing people and we want you to think it is exciting and inevitable rather than grim and voluntary.' The smokescreen is thin, but it works because the tech press rarely calls it out. Two weeks ago I said the distinction between real AI use and AI washing was a smokescreen. This week, Cognizant has helpfully provided the smoke.