Companies getting a productivity boost from AI aren't turning around and firing workers: EY survey
Daniel Howley ·
Technology Editor
Mon, December 15, 2025 at 11:03 AM EST
3 min read
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The explosion in AI models, software, and agents has raised questions about the impact of the technology on the broader job market as companies find new efficiencies from this new technology.
But according to EY's latest US AI Pulse Survey, just 17% of 500 business executives at US companies that saw productivity gains via AI turned around and cut jobs.
"There's a narrative that we hear quite frequently about companies looking to take that benefit that they're seeing and put it into the financial statements … reducing costs, or … cutting heads," EY global consulting AI leader Dan Diasio told Yahoo Finance.
"But the data that we asked those 500 executives does not bear that out. That is happening less than one out of five times, and more often they are reinvesting that," he added.
A slowing US labor market this year has sparked fears about an AI-led wave of mass firings. And many large employers have announced sizable job cuts this year.
During his press conference following the Federal Reserve's decision to cut interest rates on Wednesday, Fed Chair Jerome Powell noted the state of AI and AI-driven job cuts, saying it appears to have some influence on the job cuts taking place but is not yet a major component of these changes.
Still, he said, it's difficult to ignore the announcements that do point to AI as the reason for job cuts.
"You can't miss the big announcements of layoffs and also companies saying that they're not going to hire anybody for a long time, and they cite AI," Powell said. "That's all clearly happening."
In August, Salesforce CEO Marc Benioff said on the Logan Bartlett Show that he cut 4,000 customer support jobs, claiming he needed fewer workers after the company began using its own artificial intelligence agents.
In September, Lufthansa said it would cut 4,000 administrative jobs as it leans more on artificial intelligence. Duolingo said it would stop using contractors for work that it said AI can handle instead.
The EY survey indicates that 34% of respondents are hiring individuals with some form of expertise in AI, revealing that the adoption of AI has also opened up a skills gap in the labor force.
And not every AI transition has paid off for companies. Klarna, for instance, laid off employees and stopped hiring new ones, only to have to rehire some of the workers it had let go due to customer service complaints about the AI.
Read more: How AI, unemployment, and interest rates could shape the stock market and your investments next year
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Beyond job cuts, the EY survey found that 96% of respondents saw some kind of AI-driven productivity gains. And 56% of respondents said the technology "translated to significant measurable improvements in overall financial performance."
Additionally, 47% of respondents said they were reinvesting productivity gains back into their businesses, while 42% said they were using them to develop new AI capabilities. Another 41% said they were using AI gains to strengthen their cybersecurity posture.
According to Diasio, however, some companies that dive headfirst into the AI pool with the sole purpose of cutting costs rather than trying to use it as a means of differentiating themselves run the risk of commoditizing themselves.
"It's kind of a question of are we trying to do the same with less," Diasio said, "or are we trying to do significantly more with the same amount of capability?"
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.
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