Sam Altman Exposes AI Washing in Corporate Layoffs

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Sam Altman admits that not all job cuts blamed on AI are actually caused by AI, but are just an excuse.

So, when the boss of one of the world’s most powerful AI companies says some businesses are lying about why they are firing people, it really raises some big questions.

Sam Altman on ‘AI Washing’

Sam Altman, CEO of OpenAI, dropped a big statement at India’s AI Impact Summit last Thursday. He confirmed that many companies are engaging in “AI washing,” falsely blaming AI for layoffs they would have done anyway.

Altman told in an interview with CNBC-TV18:

“I don't know what the exact percentage is, but there's some AI washing where people are blaming AI for the layoffs they would otherwise do, and then there's some real displacement by AI of different kinds of jobs.”

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It’s an ironic admission from someone whose technology is reshaping the software engineering job market.

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Here’s where things get interesting. In 2025, U.S. companies announced 1.2 million job cuts. But AI was mentioned as a reason for only 55,000 of those layoffs, which is just 4.5% of the total.

Companies cut over a million jobs, but only blamed AI for about one in every 22 layoffs.

So what’s really happening? Are companies genuinely replacing workers with AI, or are they using it as a convenient excuse?

When ‘AI’ Becomes a Corporate Shield

The term “AI washing” describes a sneaky corporate practice of blaming layoffs on AI when the real reasons are declining profits, bad business decisions, or simply wanting to cut costs.

So why are companies doing this? There are 3 main reasons:

• AI Sounds Future-Focused: AI is seen as the future. When companies say layoffs are due to AI automation, it makes the decision sound strategic and forward-looking rather than reactive.
• It Reduces Backlash: Blaming job cuts on technology can soften public criticism. Instead of admitting management mistakes, companies can frame layoffs as an unavoidable outcome of technological progress.
• It Attracts Investors: Companies that present themselves as aggressively adopting AI often gain investor attention. Even if the actual use of AI is limited, the perception of being “AI-driven” can temporarily boost stock sentiment. Eve a survey found that 59% hiring managers use AI because it plays better with stakeholders.

But this strategy carries risks. If companies exaggerate AI’s role in layoffs or operations, they risk damaging trust with employees, customers, and shareholders. In the long run, credibility matters more than hype.

The honest answer is that AI is not the major reason for layoffs in the last couple of years. An analysis of all layoffs between 2020 and 2026 found that only 16% layoffs are directly blamed on AI. The major reasons are actually the overexpansion of the workforce in 2021-22, Mergers & acquisitions, and cost-cutting.

Bottom Line

Here’s where Altman’s message gets serious. While he calls out AI washing, he’s also warning that genuine AI-driven job loss is on the horizon.

“Well, find new kinds of jobs, as we do with every tech revolution,” Altman said at the summit. “But I would expect that the real impact of AI doing jobs in the next few years will begin to be palpable.”

Around 40% of employers expect to reduce staff due to AI by 2030, according to the World Economic Forum’s 2025 Future of Jobs Report. So, the threat is there.

The challenge for workers, policymakers, and society is learning to distinguish between legitimate technological change and corporate opportunism.