AI Automation: The Buzzword Behind The Layoff Waive?

Layoffs have reached historic highs this year, and the AI arms race could be partly to blame. In the United States, over one million jobs were cut between January and October, up 65% from the same period in 2024, according to a report by outplacement specialists Challenger, Gray & Christmas. From Amazon and UPS to Microsoft and Meta, a growing number of companies are restructuring their workforce as they adopt AI at scale. These decisions raise a broader question: how far and how fast can companies go when replacing human work with artificial intelligence? While automation at scale is not a one-size-fits-all solution, the hard truth is that the skills and jobs needed in the future of work are still largely unknown.

As AI automation moves from experiment to implementation, leadership must approach it with precision, understanding both the regulatory implications of deploying AI and the workforce consequences of reorganisation.

1. Before automation: understand what it takes

Automation used to mean mechanical tasks on factory floors. Today it encompasses generative AI (text, code, decisions), intelligent agents, and advanced robotics. For example, Germany's Agile Robotics released a full-size humanoid robot that is trained entirely in the real word with AI and can already work on assembly lines and do things like insert tiny screws and tap touchscreens. And this is just the beginning.

1.1 What this means?

From a business perspective, automation changes far more than process efficiency. Companies should also be aware of the following aspects:

• Cost structures are vulnerable, as any task that can be codified is now open to automation.
• Competitive advantage will shift to companies that adopt automation and stay agile.
• Regulatory changes matter: The EU AI Act is raising the bar for transparency, risk-management, and human oversight of AI systems. If your company deploys AI automation, you need to be prepared for audit trails, governance, data governance, bias mitigation, and residual human-in-the-loop responsibility.
• Strategic framing: If your company just automates and cuts costs without rethinking roles, culture, and value creation, it risks trading short-term savings for long-term disruption. Human capital will expect a vision, not just layoffs.

1.2 What to do?

Turning automation from concept to execution requires structure, communication, and discipline. Therefore, companies should:

• Identify automation-ready tasks. Start with repetitive, rule-based, low-variance processes that can realistically be handled by AI. Not every task that looks automatable actually is and forcing automation too early can disrupt operations.
• Establish governance. Create a cross-functional team—tech, HR, legal, and operations—to oversee AI deployment, monitor risks, and ensure accountability for both outcomes and oversight.
• Assess legal and regulatory impacts. For each automation step, define who signs off on AI-driven outcomes, how human oversight is maintained, and how documentation aligns with the AI Act's transparency and accountability requirements.
• Focus on augmentation, not replacement. AI delivers sustainable value when it enhances human capability, not when it eliminates it. Maintaining human supervision preserves expertise, judgment, and culture.
• Communicate proactively. Employees associate automation with job cuts unless leadership shapes the narrative. Be transparent about objectives, timing, and safeguards to sustain trust and engagement.

2. When automation leads to restructuring: plan, don't rush

If automation leads to a restructuring of roles, this requires a balance between business rationale and legal diligence.

From an employment law standpoint, companies should:

• assess whether reductions qualify as individual or collective redundancies, in order to observe the correct legal procedure; and
• ensure proper documentation regarding the manner in which automation changes the structure and why certain roles are affected;

Strategically, when the workforce includes high-performing or long-tenured employees, companies may also consider redeployment, retraining, or reskilling programs before opting for termination.

3. Final thoughts

AI automation is no longer a futuristic concept—it is a management decision. Ignore it and you risk falling behind. Rush it without care and you risk reputational, cultural, and legal damage. The real competitive edge won't come from being the first to automate but from being the one who does it responsibly.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.