Klarna fired 700 because of AI, then rehired them all; Cognizant cuts 15,000 in India; Germany loses 1.6M jobs to AI slowly, one task at a time; Yale says the damage from AI hasn't shown up YET

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Klarna replaced approximately 700 customer service workers in 2024 with AI [https://www.digitalapplied.com/blog/klarna-reverses-ai-layoffs-replacing-700-workers-backfired]. Klarna is primarily known for its "buy now, pay later" business model. The company CEO, Sebastian Siemiatkowski, trumpeted through every communications channel (including in-person conferences) the move as evidence that AI could perform at human-equivalent quality. By early 2026, the company reversed course by rehiring staff, with all the effort in interviews, re-training, and on-boarding that entails. Customer satisfaction scores deteriorated on complex service interactions. AI handled volume but not complexity. Edge cases, emotionally charged conversations, and multi-step problem resolution overwhelmed systems trained for routine queries. The cost savings projected at announcement did not materialize. Rehiring costs exceeded the original savings estimate. The story that was supposed to demonstrate AI’s capacity to replace human workers became the clearest illustration of why full replacement strategies fail. The Gartner data released last week [https://www.gartner.com/en/newsroom/press-releases/2026-05-05-gartner-says-autonomous-business-and-artificial-intelligence-layoffs-may-create-budget-room-but-do-not-deliver-returns] provided the statistical frame: 80% of companies that cut workers for AI saw no correlation between workforce reduction and ROI. Klarna turns that statistic into a story. Together they describe a corporate AI labor strategy that is executing at scale while failing at the level of individual firms in measurable and documented ways. The companies that are not reversing course are the ones that never had the option of reversal. Cognizant is preparing to eliminate between 12,000 and 15,000 positions globally under a restructuring initiative called Project Leap [https://www.peoplematters.in/news/strategic-hr/cognizant-may-cut-12000-to-15000-jobs-globally-under-project-leap-49579], built on the premise that AI-augmented teams can deliver what large legacy workforces once required. BUY NOW! [https://wimdodson.gumroad.com/l/gods_in_the_machine?_gl=1*19da5a0*_ga*MTEwMjE2MDkwMy4xNzc2OTY4MDQy*_ga_6LJN6D94N6*czE3NzY5NjgwNDEkbzEkZzEkdDE3NzY5NjgxNzIkajU5JGwwJGgw] Get the NEW Book that exposes the Narratives Tech uses to build its AI Empire. $4.95 flat fee for Kindle, Nook, Tablets, and Mobile. No subscription required.3.5-hr reading time. Over 250,000 of Cognizant’s 357,000 employees are based in India. Average compensation levels make workforce reduction more financially efficient there than in higher-cost geographies. Cognizant’s labor reduction program targets application maintenance, business process outsourcing, and traditional IT support. These are exactly the functions in which automation tools have the most mature capabilities. So while India is expected to absorb the majority of the cuts from AI [https://www.goodreturns.in/news/cognizant-layoffs-2026-it-company-may-cut-12000-15000-jobs-globally-major-impact-expected-in-india-1506427.html], Cognizant’s CEO framed the restructuring as moving toward a “broader and shorter pyramid.” Translation: fewer entry-level workers, more AI-augmented specialists. Industry executives are now openly stating what the Cognizant announcement confirms: [https://www.dqindia.com/news/cognizant-layoff-news-it-company-may-cut-up-to-15000-jobs-under-project-leap-11812518]clients are no longer willing to finance the traditional pyramid staffing model that depends on large cohorts of entry-level service workers. The IT outsourcing model that built India’s technology middle class for over 30 years has run its course. That is, we are seeing the twilight of a sector built on shipping large batches of recent Indian graduates to perform routine services work for Western clients. The European picture adds a longer-horizon frame to what is happening in real time. The German Institute for Employment Research projects [https://carnegieendowment.org/europe/strategic-europe/2026/02/how-europe-can-survive-the-ai-labor-transition] that 1.6 million jobs in Germany could be reshaped or lost to AI over the next 15 years. A Carnegie Endowment analysis released in February 2026 warns that the disruption is unlikely to arrive as sudden mass redundancy, though. The more probable mechanism is incremental task substitution that progressively hollows out the scope of existing roles. Jobs would shrink before disappearing to create prolonged insecurity rather than visible unemployment. The same German analysis found women are nearly twice as likely as men to work in a role with high AI exposure. The most useful data point for understanding the week arrives from an unexpected direction. The Yale Budget Lab released new econometric research on May 7 [https://budgetlab.yale.edu/research/ai-probably-not-yet-reason-labor-market-weakening] found that the current weakening of the U.S. labor market cannot yet be statistically attributed to AI. BUY NOW [https://wimdodson.gumroad.com/l/invasion_ai?_gl=1*g1iey2*_ga*OTc1NjU2NTcyLjE3NzQwMzA3NjM.*_ga_6LJN6D94N6*czE3NzQwMzMyMjUkbzIkZzEkdDE3NzQwMzQ2ODgkajYwJGwwJGgw]! Get the book that examines how the AI invasion already happened. You just weren’t invited. $9.95 flat fee for Kindle, Nook, Tablets, and Mobile. No subscription required. 2-hr reading time. Net payroll growth has run at only about 20,000 jobs per month over the prior year. The unemployment rate has risen from 3.4% in April 2023 to 4.3% in March 2026. Layoffs are low. Hiring is low. Unemployed job seekers are having a particularly difficult time finding work. The Budget Lab concludes “AI seems quite likely to eventually leave its mark on the labor market, even if it has not already.” The U.S. labor market’s net job creation has run near zero since early 2025 [https://www.allianz-trade.com/en_global/news-insights/economic-insights/Happy-labor-day-How-geopolitics-immigration-AI-reshape-work.html] while unemployment holds at 4.3%. That is a labor market that is neither growing nor collapsing. It is compressing. The statistical methods that measure unemployment register job loss. They do not register job shrinkage. The AI Labor Report is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber. A worker whose role has had 40% of its tasks automated away does not appear in the unemployment data. The gap between what the data currently shows about AI-related job loss and how corporate is reshaping hiring pipelines points in the direction of what will likely com. what is forming inside corporate hiring pipelines is an indication of what will likely come. Klarna’s experience is a prime example of AI “irrational exuberance.” Klarna clearly implemented AI corporate-wide prematurely. Is the rest of the corporate world, globally, intent on following Klarna’s example? Or will AI irrational exuberance unravel the labor markets before before Wall Street understands what’s happening? Get full access to The AI/Labor Report at ailabor.substack.com/subscribe [https://ailabor.substack.com/subscribe?utm_medium=podcast&utm_campaign=CTA_4]

Jobs vanish without layoff announcements; Intuit fires the very workers who built it and buy it; 142,000 tech jobs gone; 6 million clerical workers can't adapt; they're already using the tools

The Jobs That Quietly Disappear A Yale analysis [https://insights.som.yale.edu/insights/the-real-job-destruction-from-ai-is-hitting-before-careers-can-start]finds that the biggest labor market impact of agentic AI will not appear in layoff data. It will instead appear in opportunities that quietly disappear before anyone notices. Entry-level roles that companies stop posting. Hiring pipelines that close without explanation. First jobs that never get created. The researchers describe the average firm’s response to AI not as mass layoffs but as silently closing the door to new workers. The distinction matters because the second version produces no accountability. There is no date, no memo, no severance package, and no WARN filing. There is only a graduating class that finds the door closed when it arrives. For instance, C.H. Robinson announced it is handling 29% more freight volume today than it did in early 2019 [https://fortune.com/2026/04/29/ai-agentic-entry-level-jobs-disappearing-yale-celi-sonnenfeld/] while employing 30% fewer workers. AI agents book roughly half of its carrier bookings. The company did not announce a mass layoff. It simply stopped needing the same number of people to do the same amount of work. The jobs did not disappear dramatically. They evaporated. The Company That Cut 17% of Its Workforce While Selling AI to Its Own Customers Intuit cut 3,000 workers, representing 17% of its global headcount, on May 20. [https://www.cbsnews.com/news/ai-layoffs-hiring-entry-level-workers/] The company makes TurboTax and QuickBooks. Its products serve tens of millions of American small businesses and independent filers. The workers who built and maintained those tools are now gone. The stated reason for the layoff is a shift toward AI. The practical result is that the same company selling AI-powered accounting tools to small business owners just eliminated the human workforce that built those tools. Cutting the people while selling the product to the customers those people served describes how the displacement cycle closes the loop. The small business owner using QuickBooks is the customer. The QuickBooks employee who lost her job is also the customer. The AI product is now serving both of them while employing fewer of the people who made it possible. BUY NOW! [https://wimdodson.gumroad.com/l/gods_in_the_machine?_gl=1*19da5a0*_ga*MTEwMjE2MDkwMy4xNzc2OTY4MDQy*_ga_6LJN6D94N6*czE3NzY5NjgwNDEkbzEkZzEkdDE3NzY5NjgxNzIkajU5JGwwJGgw] Get the NEW Book that exposes the Narratives Tech uses to build its AI Empire. $4.95 flat fee for Kindle, Nook, Tablets, and Mobile. No subscription required.3.5-hr reading time. The Layoffs That Are Not Making Business Sense CIO Magazine [https://www.cio.com/article/4171054/ai-driven-layoffs-arent-making-business-sense.html] published an analysis this month examining whether AI-driven layoffs are producing the results companies claimed they would. The piece focuses on Block’s decision to cut 40% of its workforce after projecting gross profits of nearly $12 billion for 2026. A technology leadership analyst quoted in the piece asks directly: “Who at that decision table was talking about the human cost of firing 4,000 people?” The piece concludes that the move was economically unnecessary given the company’s financial position. The question the piece raises is the one the Forrester research flagged earlier this year. Companies are making permanent workforce decisions based on AI efficiency projections that have not yet arrived. In other words, the AI tools that justified the cuts are still being assessed. The workers who were cut are gone. The Running Total Just Hit 142,000 Tech Times reported [https://www.techtimes.com/articles/317392/20260529/tech-layoffs-reach-142000-2026-profitable-companies-cut-jobs-fund-700b-ai-infrastructure.htm] on May 29 that tech sector layoffs in 2026 have reached 142,000, with Amazon, Microsoft, Alphabet, and Meta committed to a combined $700 billion in capital expenditure. Stanford HAI data cited in the piece shows software developer employment for workers under 26 fell nearly 20% since 2024. Wharton management professor Peter Cappelli describes the dynamic [https://www.techtimes.com/articles/317392/20260529/tech-layoffs-reach-142000-2026-profitable-companies-cut-jobs-fund-700b-ai-infrastructure.htm] as companies announcing layoffs by claiming AI will cover the work while the AI has not yet done so. The Workers Least Able to Recover Are the Ones Nobody Is Talking About A Brookings Institution and Centre for the Governance of AI analysis [https://www.brookings.edu/articles/measuring-us-workers-capacity-to-adapt-to-ai-driven-job-displacement/] published in February identifies 6.1 million American workers who face both high AI exposure and low adaptive capacity. These are secretaries, office clerks, payroll processors, receptionists, and tax preparers. Of these workers, 86% are women. Financial analysts scored 99% for adaptive capacity on the study’s measure. Office clerks scored 22%. These occupations are concentrated in smaller cities, university towns, and midsized markets in the Mountain West and Midwest. These workers are not the demographic the AI labor debate centers on. The debate centers on software engineers, lawyers, and accountants because those are the people writing about it. The 6.1 million clerical and administrative workers facing maximum exposure and minimum ability to recover are not writing Substack posts about their situation. They are answering phones, processing invoices, and preparing tax returns in Boise and Cheyenne and Lansing, and the policy response building in Sacramento and Washington is not designed with them specifically in mind. BUY NOW [https://wimdodson.gumroad.com/l/invasion_ai?_gl=1*g1iey2*_ga*OTc1NjU2NTcyLjE3NzQwMzA3NjM.*_ga_6LJN6D94N6*czE3NzQwMzMyMjUkbzIkZzEkdDE3NzQwMzQ2ODgkajYwJGwwJGgw]! Get the book that examines how the AI invasion already happened. You just weren’t invited. $9.95 flat fee for Kindle, Nook, Tablets, and Mobile. No subscription required. 2-hr reading time. They Are Already Using the Tools That Threaten Their Jobs The American Society of Administrative Professionals 2026 State of the Profession Report [https://www.asaporg.com/articles/the-ai-conversation-is-missing-something-about-administrative-professionals/] finds that more than three-quarters of administrative professionals already use AI daily in their work. It’s the same population that Brookings identifies as most exposed and least able to adapt. Ironically, it is also the population most actively integrating AI into daily tasks. They are using the tools. They are learning the workflows. They are doing what every piece of career advice tells them to do. The AI/Labor Report is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber. Using AI daily, however, does not close the gap between a 22% adaptability score and a 99% one. It does not replace the savings, the educational credentials, the broad skill set, or the access to a strong urban job market that the Brookings measure identifies as the actual determinants of who recovers when their role disappears. Get full access to The AI/Labor Report at ailabor.substack.com/subscribe [https://ailabor.substack.com/subscribe?utm_medium=podcast&utm_campaign=CTA_4]

1 de jun de 20267 min

IMF says AI is shrinking the middle class; 134,000 tech jobs gone this year; Upwork fires the workers it sells work to; Citi cutting 20,000; two CEOs soften their AI Jobpocalypse story before they IPO

The Middle Class Is the Target The International Monetary Fund does not typically frame its research in personal terms. Its January 2026 “Staff Discussion Note” on AI and new job creation [https://www.imf.org/en/publications/staff-discussion-notes/issues/2026/01/09/bridging-skill-gaps-for-the-future-new-jobs-creation-in-the-ai-age-572136] does. https://www.imf.org/en/publications/staff-discussion-notes/issues/2026/01/09/bridging-skill-gaps-for-the-future-new-jobs-creation-in-the-ai-age-572136The IMF finds that in regions with higher demand for AI-related skills, employment levels are 3.6% lower in occupations that are highly exposed to AI but offer limited scope for human-AI complementarity. The workers absorbing those losses are in entry-level and middle-skilled roles. Listen on Apple Podcasts [https://podcasts.apple.com/us/podcast/the-ai-labor-report/id1896663061] About one in ten job vacancies in advanced economies now demands at least one new AI-related skill [https://www.imf.org/en/blogs/articles/2026/01/14/new-skills-and-ai-are-reshaping-the-future-of-work]. Those vacancies pay more. The jobs that do not require new AI skills are paying less and disappearing faster. So, AI skill premiums benefit workers at the top of the wage distribution. Workers at the bottom are also benefiting indirectly through service consumption. The group in between absorbs the displacement without capturing the gains. That group is the middle class. The IMF is an institution that chooses its words carefully. It used the phrase “contributing to the shrinking of the middle class” in a published research note. JPMorgan Just Put $40 Million on the Table for the Workers the IMF Is Describing Jamie Dimon arrived at a similar conclusion through a different route. In March, the JPMorgan CEO declared that the American Dream was “slipping out of reach for too many people.” This week JPMorgan published details of a $40 million small-business investment program [https://fortune.com/2026/05/27/jamie-dimon-american-dream-jpmorganchase-40-million-small-business/]. The program routs grants through community development financial institutions toward the communities his bank’s own data identifies as falling behind. JPMorgan’s own research finds that fewer than 10% of new businesses reach $1 million in revenue within five years. The structural disadvantage is concentrated among founders who lack inherited wealth or strong professional networks. The Freelance Economy’s Version of Work Degradation The online contract platform Upwork based its entire business on the premise that human knowledge work is abundant. It just cut a quarter of its own staff. Upwork CEO Hayden Brown announced on May 7 [https://officechai.com/ai/upwork-lays-off-25-of-its-workforce-says-ai-will-lead-to-smaller-teams/] that the company would reduce its workforce by approximately 25%. Her memo, published on Upwork’s website, stated: “Two pizza teams are dead. AI means smaller, differently resourced teams in product and engineering can make a bigger impact than ever.” BUY NOW! [https://wimdodson.gumroad.com/l/gods_in_the_machine?_gl=1*19da5a0*_ga*MTEwMjE2MDkwMy4xNzc2OTY4MDQy*_ga_6LJN6D94N6*czE3NzY5NjgwNDEkbzEkZzEkdDE3NzY5NjgxNzIkajU5JGwwJGgw] Get the NEW Book that exposes the Narratives Tech uses to build its AI Empire. $4.95 flat fee for Kindle, Nook, Tablets, and Mobile. No subscription required.3.5-hr reading time. The irony in the announcement is that Upwork exists to connect businesses with independent knowledge workers: writers, designers, developers, analysts, and marketers. Those are precisely the categories where AI has displaced freelancers most aggressively. Writing projects on Upwork fell 32% year over year in 2025. [https://www.selfemployed.com/news/ai-freelance-platforms-2026/] The CEO of the platform built on freelance demand is cutting staff because the demand for the work the platform sells has contracted. The displacement has an additional dimension. A customer support specialist or content writer displaced from one platform cannot simply apply for the same role at a competitor. Every competitor is reducing that function simultaneously. https://www.vaasblock.com/news/ai-layoffs-workforce-restructuring-cloudflare-coinbase-2026/Read my substack article “How to Ford ‘Amodei’s Moat:’ A Worker’s Guide to the AI Labor Shift [https://futureforwarded.substack.com/p/how-to-ford-amodeis-moat-a-workers]“ to find out how and why AI is making a career change in the labor marketplace has become more difficult. Nevertheless, the supply of mid-market writing, design, and support work is declining across the entire market, not redistributing to a different platform. [https://www.vaasblock.com/news/ai-layoffs-workforce-restructuring-cloudflare-coinbase-2026/] That is the structural unemployment dimension of 2026 that the aggregate statistics are not capturing. BUY NOW [https://wimdodson.gumroad.com/l/invasion_ai?_gl=1*g1iey2*_ga*OTc1NjU2NTcyLjE3NzQwMzA3NjM.*_ga_6LJN6D94N6*czE3NzQwMzMyMjUkbzIkZzEkdDE3NzQwMzQ2ODgkajYwJGwwJGgw]! Get the book that examines how the AI invasion already happened. You just weren’t invited. $9.95 flat fee for Kindle, Nook, Tablets, and Mobile. No subscription required. 2-hr reading time. The Running Total Just Crossed 134,000 A real-time tracker updated today [https://skillsyncer.com/layoffs-tracker]puts the 2026 tech sector layoff total at 134,603 workers across 212 layoff events since January 1. The pace is faster than the same period in 2025. Companies are simultaneously cutting in content creation, customer support, data entry, and basic coding while expanding in AI safety, machine learning operations, and AI-human collaboration roles. The workers being cut and the workers being hired are different people with different skills in different cities. The tracker number has grown by more than 20,000 since Tuesday. Citigroup Is Executing the Final Phase of Its 20,000-cuts Job Plan Citigroup filed WARN notices in New Jersey this week [https://www.thelayoff.com/citigroup] covering separations scheduled between May 21 and June 14, 2026, as part of an AI automation and restructuring strategy. [https://www.thelayoff.com/citigroup] The filings are part of Citi’s multi-year plan to eliminate 20,000 jobs across its global workforce by the end of this year. CFO Mark Mason has stated that headcount will keep declining as AI tools take hold across middle-office and operational functions. WARN notices are public legal documents. They put job losses on the record in a way that earnings call language does not require. The Citigroup filings this week describe tellers, back-office analysts, compliance staff, and IT support workers whose roles are being phased out as AI monitoring systems and automated processes replace them. These are the banking sector equivalents of the workers the IMF is tracking in its middle-class polarization data. The IPO Motive Behind the Week’s Altman Drama This week began with Sam Altman speaking to a group in Sydney and saying the jobs apocalypse he had warned about had not arrived. That story, covered in Tuesday’s edition, acquired a second dimension on Wednesday. Fortune reported [https://fortune.com/2026/05/26/sam-altman-dario-amodei-walking-back-ai-jobs-apocalypse-prophecies-ipo/] that both Altman and Anthropic CEO Dario Amodei have publicly reversed their most alarming predictions about AI job losses, with the timing coinciding directly with IPO preparations. OpenAI is targeting a late 2026 public listing at a valuation near $1 trillion. Anthropic is planning a 2026 offering at approximately $380 billion. Amodei previously warned that 50% of white-collar jobs faced elimination within several years. He now frames automation as a productivity multiplier. “If you automate 90% of the job,” he said this month, “then everyone does the 10% of the job.” The 10%, he argues, expands to fill 100% of what people do and multiplies their output tenfold. The argument is coherent as economic theory. It describes a future in which workers remain employed and become more productive. It doesn’t seem, though, that many CEOs are treading the “pro-worker” path of AI use. The Yale Budget Lab Data Altman and Amodei Are Leaning On The aggregate stability data that both CEOs are now citing as evidence their earlier predictions were wrong comes from the Yale Budget Lab’s ongoing labor market tracker. The Yale research [https://mlq.ai/news/altman-and-amodei-walk-back-ai-job-apocalypse-warnings-ahead-of-trillion-dollar-ipos/]finds no significant shifts in occupational mix or unemployment for high-AI-exposure jobs since ChatGPT’s 2022 launch. The AI/Labor Report is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber. The same research notes that occupational shifts already visible in 2021 were underway before generative AI tools became widely available. The Yale data measures employed workers in formal occupations. It counts people who are in the system. It does not count the contractors, gig workers, and the freelancers who used to work on Upwork. Further, it does not account for the early-exit buyout takers who have already left formal employment and fall outside the tracking algorithms the aggregate statistics rely on. The stability finding is accurate for the population the Yale Report measures.However, that population is getting smaller. Get full access to The AI/Labor Report at ailabor.substack.com/subscribe [https://ailabor.substack.com/subscribe?utm_medium=podcast&utm_campaign=CTA_4]

29 de may de 20269 min

Klarna fired 700 because of AI, then rehired them all; Cognizant cuts 15,000 in India; Germany loses 1.6M jobs to AI slowly, one task at a time; Yale says the damage from AI hasn't shown up YET

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