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The Scapegoat Strategy: How AI Takes the Blame for Deeper Economic Shifts

Behind the headlines, layoffs aren’t about machines replacing people—they’re about executives using AI as a convenient cover for cost-cutting, offshoring, and post-pandemic corrections.

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In this issue:

 AI isn’t taking your job—your CEO is letting you think it is.

In 2025, about 800,000 layoffs were announced. Only ~3.4% were explicitly attributed to AI. Yet “AI transformation” has become the catch-all story: restructuring, offshoring, post-pandemic corrections, even wage stalls—all wrapped in a future-ready narrative.

Why? Because Wall Street rewards the myth. Because “we overhired” doesn’t play as well as “AI strategy.”

This isn’t about technology replacing humans overnight—it’s about companies reallocating capital, reframing mistakes, and finding cover in the hype cycle.

👉 Read on for: “The Scapegoat Strategy: How AI Takes the Blame for Deeper Economic Shifts

The HR Blotter: Case Files From the HR Underworld

No Pink Slips from a Machine - California’s ready to muzzle robo-bosses. SB 7 says no algorithm can hire, fire, or discipline without a human in the loop. Workers get notice, get access to their data, and get protection from black-box judgments. For employers, it’s a compliance minefield. For workers, it’s proof the machines don’t get the final word. The bots aren’t taking over—but the regulators sure are.

Brewed in Black: Starbucks Workers Fight Dress Code Costs - Starbucks baristas are dragging the coffee giant into court over its new all-black dress code. Workers in Illinois, Colorado, and California say they’ve had to shell out their own cash for compliant clothes—sixty-dollar shoes, stacks of black shirts, even piercing removals—without reimbursement. For employees already stretched paycheck to paycheck, the policy feels less like “brand consistency” and more like corporate cost-shifting.

Disabled Workers Hired, Not Heard - Japan’s hiking its disability hiring quota, but most companies can’t clear the bar. Too many disabled workers get shunted into token jobs—sorting mail, folding shirts—while real opportunities stay locked behind barriers. For HR, this is the test: build workplaces where talent thrives, or keep faking inclusion with headcounts and fines.

The Global Rights Index 2025 is a warning shot: workers’ rights are under attack everywhere. Strikes are outlawed in most countries, and even bargaining is treated like a crime. Union leaders are jailed, beaten, and killed while governments look away. Gig workers and migrants get chewed up as disposable labor in the name of efficiency. The verdict is clear—corporate power is rising, and dignity at work is getting buried.

DC Showdown: Who Pays When AI Takes the Jobs? - Washington’s bracing for a fight over AI’s job-killing potential. At Axios’ AI+ Summit, Anthropic’s Dario Amodei warned of a white-collar wipeout, saying government may have to step in and even tax AI companies to soften the blow. The White House’s Jacob Helberg pushed back, betting on the grit of private industry to adapt without Uncle Sam holding hands. Lawmakers like Ro Khanna and Mark Kelly pitched bigger plays—an “AI Academy,” a workforce administration, even a trust fund bankrolled by tech giants. The battle lines are clear: who pays the bill when machines take the work, the corporations cashing in or the workers left behind?

The Jim Stroud Podcast

Not subscribed to The Jim Stroud Podcast? Then you’ve been flying blind. Here’s a taste of what they’ve been hearing—while you’ve been missing it.

Job Hunting is a Team Sport

Landing the right job isn’t just about sending out applications—it’s about leveraging the right network, resources, and support along the way.

In this session, Job Hunting is a Team Sport, we’ll explore how collaboration, community, and strategy can make your job search more effective and less overwhelming.

Date: Monday, September 22, 2025
Time: 1:00 pm EST
Cost: Free

The Scapegoat Strategy: How AI Takes the Blame for Deeper Economic Shifts 

Here’s the part nobody on the earnings call will say out loud: AI isn’t taking your job—your CEO is just fine letting you think it is.

Headlines chant “robots did it,” execs sermonize about an “AI-first future,” and the street applauds. But the ledger tells a colder story. In 2025, about 800,000 workers were laid off across sectors; around 27,000—roughly 3.4%—were explicitly pinned on AI. Yet AI is the new boogeyman, the one-size-fits-all alibi for everything: mass cuts, wage stall, offshoring, cleanup from the pandemic hiring binge.

Welcome to the AI scapegoat era—where “intelligent transformation” is the cover story for profit defense, strategic pivots, and reversing 2020–2022’s headcount bubble.

Numbers vs. Narratives

On the ground, adoption is rising while pink slips rarely cite AI as the cause. The New York Fed found AI use jumped roughly 60%, yet “very few firms reported AI-induced layoffs.” Meanwhile, tech alone shed 80,000 people in 2025, and the phrasing mutated in real time: Q1 layoffs attributed to AI were 13%; Q2 jumped to 32%; July pinned 29% of 35,000 cuts on AI. That’s not technology rolling out. That’s a storyline catching on. (For the vibes check on that: YouTube.)

The Meta Example

Meta’s “AI transformation” erased 21,000 roles. The script: “restructuring for an AI-first future,” “optimizing for integration.” The spreadsheet: headcount ballooned from 44,942 (2019) to 87,314 (2022)a 94% leap on pandemic-era optimism. In 2023, the headcount dropped sharply, a -22% decline. In 2024, the workforce rebounded a bit and now growth has slowed to 2.5%. This leaves roughly 19,200 excess roles. “We overhired” sounds clumsy. “AI transformation” sounds visionary.

The Post-Pandemic Correction Masquerade

Across tech, 2020–2022 headcounts swelled 40–60%. Then gravity returned. Amazon went from 798,000 (2019) to 1.608M (2021)+101%and later cut 18,000 while citing “AI-driven warehouse optimization.” The narrative reframes a correction as progress: not “we misread demand,” but “we’re future-proofing.” Wall Street eats it up: companies invoking AI in layoff stories see stock bumps; among them: Oracle, Microsoft, Salesforce and UPS. Analysts label them “strategic.” The market rewards the myth.

Offshore Arbitrage, Now With AI Gloss

The blunt play: swap $95k domestic devs for $18k–$35k offshore talent and call it “AI-assisted.” One fintech cut 500 U.S. engineers, hired 800 in India and Poland for “AI-assisted development,” and pocketed $35M in annual savings—same capacity, different payroll. The tools didn’t erase the job. They just made the reallocation smoother.

Investment Reallocation Theater

This is the play: cut people to fund machines.

  • The scale. Big Tech has earmarked $500B+ for AI infrastructure by 2026. Rough pledges: Meta $65B, Microsoft $80B, Google $120B, Amazon $75B.

  • The savings. 80,000 tech layoffs in 2025 × $150,000 fully loaded per employee ≈ $12B in annual savings.

  • Where it goes. If 85% of those savings are redirected to AI buildouts, that is $12B × 0.85 = $10.2B every year.

Bottom line: the layoff line item is doubling as the AI budget.

The choreography:

  • Phase 1 (’24–’25): Reduce headcount; free capital.

  • Phase 2 (’25–’26): Spend big on compute, models, data.

  • Phase 3 (’26–’27): Deploy and tune.

  • Phase 4 (’27–’28): Monetize and dominate.

(Wow. I am so cynical in my old age.)

The Regulatory Loophole

The rules weren’t built for this. The WARN Act wants 60 days’ notice for mass layoffs. Label the move a “technological improvement,” and an AI-justified cut slips past the bouncer like it isn’t a layoff at all—just progress.

Enter the lawyers with a new product line: “AI-compliant layoffs.” The playbook (as little birdies tell me):

  • Retroactive paperwork: Recast “roles we don’t want” as “performance gaps in AI-replaceable skills.”

  • Job rewrites: Update descriptions so yesterday’s team no longer “meets AI-era requirements.”

  • Capability tests: Run “AI assessments” that conveniently validate the decision already made.

The documentation is pristine. The motives, not so much. Companies build tidy paper trails that scream “AI made us do it,” when the real drivers are the old standbys: cost cuts, performance culls, strategic U-turns.

Jurisdiction shopping:

  • EU-based firms shift work to the U.S. or other regions with lighter AI disclosure.

  • U.S.-based firms move headcount to cheaper jurisdictions with looser employment protections and minimal AI reporting—then brand it “AI transformation.”

Net effect: the press release stays noble; the jobs move to wherever the rules and costs are kindest.

All of that to say this…

AI isn’t the villain—it’s playing one on TV. Today’s layoff stories are mostly pandemic corrections, offshoring, and capital shifts wearing an AI mask. The people and companies that win the real transition will see through the costume: build AI-complementary skills, invest in human-AI workflows, and insist on transparency. The question isn’t whether AI will change work. It will. The question is whether we let the AI story excuse the choices leaders are making right now.

 

The Comics Section

One more thing before I go… maybe two.

This dropped earlier today:

Unpacking the Myths, Benefits, and Challenges of Hiring and Working as Digital Nomads

What does it really mean to be a digital nomad—and why should businesses care? In this episode, Lesley Pyle, Founder of HireMyMom.com, unpacks the myths, benefits, and challenges of hiring and working as digital nomads. From global talent access to compliance risks, she shares practical tips for HR leaders and small business owners—plus where to grab her Free Smart Hiring Guide.

Pass it on.

And as of this writing, I’m plotting part 3 of this series on AI’s impact on work.

Right now I’m thinking - HR in 2025: ordered to cut costs and “do AI,” managing scared employees while 95% of pilots flop. Fed says retrain > layoff, but disruption looms.

Next week you’ll see how much my mind meandered on this. Ciao!

Gimme feedback! I can take it.