AI-related layoffs a boost for stocks? Not necessarily

AI started a bull run in stocks that took the broader market to new heights. However, companies that attribute workforce reductions to new technology have not always been so successful.

CNBC compiled a list of 23 people S&P 500 Companies across multiple industries and sectors to see how their stocks are faring in the wake of AI-related layoffs. Specifically, we looked for companies that explicitly referenced AI or implied increased use of the technology when announcing workforce reductions.

As of May 15, 13 of these companies, or 56%, were trading in the red following layoff announcements. For companies whose stocks fell following AI-related layoffs, the average decline was about 25%.

shoe giant Nike It laid off nearly 800 workers in January, citing a plan to accelerate “automation” of U.S. distribution centers. As of May 15, the stock was trading down nearly 35% since the workforce reduction.

Similarly, sales force There has been a decline of approximately 32% since news of AI-related layoffs became public at the end of last summer. The customer relationship management company cut its headcount by 4,000 in September and said its team of AI-powered “Agentforce” customer service bots had replaced some support engineers.

Online market later the same month Basrr It has also laid off 30% of its staff to become “an AI-first company with a leaner, faster, modern AI-focused technology infrastructure” and a smaller team, according to CEO Micha Kaufman. The stock fell 54% between then and May 15.

Although it’s only a small sample size, the data underscores a troubling truth: Investors don’t know what to make of artificial intelligence and its potential impacts, even as use of the technology expands, Daniel Keum, a professor of management at Columbia Business School, told CNBC.

“AI is what we call a kind of macro shock,” Keum said. “There’s so much uncertainty about what to do. No one can fully grasp it… [its] medium to long-term impact.”

What is certain is that AI is being used “in the vast majority” to reduce labor costs, although the technology’s makers tout other applications, he said.

“The sum of productivity gains is zero, so yes… I am using new technologies to reduce staff… but so are my competitors,” Keum said. “If everyone is improving in some way, then the bottom line is changing and no one is more profitable than that.”

With a guessAt least 112,000 job losses since the beginning of 2025 could be attributed to the adoption of AI. In a study published in November, the Massachusetts Institute of Technology found that AI could currently do the jobs of 11.7% of the US labor market and save companies up to $1.2 trillion in wages across a variety of industries.

However, investors have struggled to discern whether firms are truly making AI-informed decisions or simply using the technology as a way to explain old-fashioned cost cutting or balance sheet errors, according to Ally Warson, partner at AI-focused venture capital firm UP.Partners.

The concept is so engrained in the minds of investors and other members of society that it even has a name: “AI washing.”

“Companies will use whatever is in the media or the accepted narrative to potentially hide why they may or may not be laying off people,” Warson told CNBC.

According to Keum, investors are grappling with how to measure the impact of artificial intelligence on companies as various geopolitical and macroeconomic issues also put pressure on stocks.

Keum said “major geopolitical shocks” such as the Iran war led to layoffs, while President Donald Trump’s tariffs announced last year increased pressure to cut costs. Also on the agenda is the elimination of excessive hiring during the pandemic period.

“Then there is the real shock of AI,” Keum said. “How much we can attribute to each… is anyone’s guess.”

Amid these uncertainties, investors are looking beyond layoffs to other ways AI can boost profitability, according to Noah Hamman, founder and CEO of investment management firm AdvisorShares.

“Layoffs are not enough,” Hamman said. “What are people looking at… [companies are] “We’re spending and then we’re trying to figure out who’s actually going to get successful returns on all of those investments.”

The investor cited Google, which is owned by a publicly traded company, as an example AlphabetAs an example of a company that increased its business with artificial intelligence. He noted that generative AI tool Gemini contributes to cloud revenue, powers search, and increases user engagement across the Google ecosystem.