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AI layoffs are looking more and more like corporate fiction that’s masking a darker reality

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Despite breathless headlines warning of a robot takeover in the workforce, a new research briefing from Oxford Economics casts doubt on the narrative that artificial intelligence is currently causing mass unemployment. According to the firm’s analysis, “firms don’t appear to be replacing workers with AI on a significant scale,” suggesting instead that companies may be using the technology as a cover for routine headcount reductions.

In a January 7 report, the research firm argued that, while anecdotal evidence of job displacement exists, the macroeconomic data does not support the idea of a structural shift in employment caused by automation. Instead, it points to a more cynical corporate strategy: “We suspect some firms are trying to dress up layoffs as a good news story rather than bad news, such as past over-hiring.”

Spinning the narrative

The primary motivation for this rebranding of job cuts appears to be investor relations. The report notes that attributing staff reductions to AI adoption “conveys a more positive message to investors” than admitting to traditional business failures, such as weak consumer demand or “excessive hiring in the past.” By framing layoffs as a technological pivot, companies can present themselves as forward-thinking innovators rather than businesses struggling with cyclical downturns.

In a recent interview, Wharton management professor Peter Cappelli told Fortune that he’s seen research about how, because markets typically celebrate news of job cuts, firms announce “phantom layoffs” that never actually occur. Companies were arbitraging the positive stock-market reaction to the news of a potential layoff, but “a few decades ago, the market stopped going up because [investors] started to realize that companies were not actually even doing the layoffs that they said they were going to do.”

When asked about the supposed link between AI and layoffs, Cappelli urged people to look closely at announcements. “The headline is, ‘It’s because of AI,’ but if you read what they actually say, they say, ‘We expect that AI will cover this work.’ Hadn’t done it. They’re just hoping. And they’re saying it because that’s what they think investors want to hear.”

Data behind the hype

The Oxford report highlighted data from Challenger, Gray & Christmas, the recruiting firm that is one of the leading providers of layoff data, to illustrate the disparity between perception and reality. While AI was cited as the reason for nearly 55,000 U.S. job cuts in the first 11 months of 2025—accounting for over 75% of all AI-related cuts reported since 2023—this figure represents a mere 4.5% of total reported job losses.

By comparison, job losses attributed to standard “market and economic conditions” were four times larger, totaling 245,000. When viewed against the broader backdrop of the U.S. labor market, where 1.5 million to 1.8 million workers lose their jobs in any given month, “AI-related job losses are still relatively limited.”

The productivity puzzle

Oxford posits a simple economic litmus test for the AI revolution: if machines were truly replacing humans at scale, output per remaining worker should skyrocket. “If AI were already replacing labour at scale, productivity growth should be accelerating. Generally, it isn’t.”

The report observes that recent productivity growth has actually decelerated, a trend that aligns with cyclical economic behaviors rather than an AI-driven boom. While the firm acknowledges that productivity gains from new technologies often take years to materialize, the current data suggests that AI use remains “experimental in nature and isn’t yet replacing workers on a major scale.”

At the same time, recent data from the Bureau of Labor Statistics confirms that the “low-hire, low-fire” labor market is morphing into a “jobless expansion,” KPMG chief economist Diane Swonk previously told Fortune‘s Eva Roytburg.

This tallies with what Bank of America Research’s Head of US Equity & Quantitative Strategy, Savita Subramanian, told Fortune in August about how companies have learned in the 2020s to generally replace people with process. At the same time, she agreed that productivity measures “haven’t really improved all that much since 2001,” recalling the famous “productivity paradox” identified by Nobel prize-winning economist Robert Solow: “You can see the computer age everywhere but in the productivity statistics.”

The briefing also addresses fears that AI is eroding entry-level white-collar jobs. While U.S. graduate unemployment rose to a peak of 5.5% in March 2025, Oxford Economics argued this is likely “cyclical rather than structural,” pointing to a “supply glut” of degree-holders as a more probable culprit. The share of 22-to-27-year-olds with university education in the U.S. rose to 35% by 2019, with even sharper increases observed in the Eurozone.

Ultimately, Oxford Economics concludes that shifts in the labor market are likely to be “evolutionary rather than revolutionary.”



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Electricity as the new eggs: Affordability concerns will swing the midterms just like the 2024 election, Bill McKibben says

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That sun has provided him cheap power for 25 years, and this month he installed his fourth iteration of solar panels on his Vermont home. In an interview after he set up the new system, he said President Donald Trump’s stance against solar and other cheap green energy will hurt the GOP in this year’s elections as electricity bills rise.

After the Biden and Obama administrations subsidized and championed solar, wind and other green power as answers to fight climate change, Trump has tried to dampen those and turn to older and dirtier fossil fuels. The Trump administration froze five big offshore wind projects last month but judges this week allowed three of the projects to resume. Federal clean energy tax incentives expired on Dec. 31 that include installing home solar panels.

Meanwhile, electricity prices are rising in the United States, and McKibben is counting on that to trigger political change.

“I think you’re starting to see that have a big political impact in the U.S. right now. My prediction would be that electric prices are going to be to the 2026 election what egg prices were to the 2024 election,” said McKibben, an author and founder of multiple environmental and activist groups. Everyday inflation hurt Democrats in the last presidential race, analysts said.

The Trump administration and a bipartisan group of governors on Friday tried to step up pressure on the operator of the nation’s largest electric grid to take urgent steps to boost power supplies in the mid-Atlantic and keep electricity bills from rising even higher.

“Ensuring the American people have reliable and affordable electricity is one of President Trump’s top priorities,” said White House spokesperson Taylor Rogers.

Renewable energy prices drop around the world

Globally, the price of wind and solar power is plummeting to the point that they are cheaper than fossil fuels, the United Nations found. And China leads the world in renewable energy technology, with one of its electric car companies passing Tesla in annual sales.

“We can’t economically compete in a world where China gets a lot of cheap energy and we have to pay for really expensive energy,” McKibben told The Associated Press, just after he installed a new type of solar panels that can hang on balconies with little fuss.

When Trump took office in January 2025, the national average electricity cost was 15.94 cents per kilowatt-hour. By September it was up to 18.07 cents and then down slightly to 17.98 cents in October, according to the U.S. Energy Information Administration.

That’s a 12.8% increase in 10 months. It rose more in 10 months than the previous two years. People in Maryland, New Jersey and Maine have seen electricity prices rise at a rate three times higher than the national average since October 2024.

At 900 kilowatt-hours per month, that means the average monthly electricity bill is about $18 more than in January 2025.

Democrats blame Trump for rising electric bills

This week, Democrats on Capitol Hill blamed rising electric bills on Trump and his dislike of renewable energy.

“From his first day in office, he’s made it his mission to limit American’s access to cheap energy, all in the name of increasing profits for his friends in the fossil fuel industry. As a result, energy bills across the country have skyrocketed,” Illinois Rep. Sean Casten said at a Wednesday news conference.

“Donald Trump is the first president to intentionally raise the price of something that we all need,” Hawaii Sen. Brian Schatz, also a Democrat, said Wednesday on the Senate floor. “Nobody should be enthused about paying more for electricity, and this national solar ban is making everybody pay more. Clean is cheap and cheap is clean.”

Solar panels on McKibben’s Vermont home

McKibben has been sending excess electricity from his solar panels to the Vermont grid for years. Now he’s sending more.

As his dog, Birke, stood watch, McKibben, who refers to his home nestled in the Green Mountains of Vermont as a “museum of solar technology” got his new panels up and running in about 10 minutes. This type of panel from the California-based firm Bright Saver is often referred to as plug-in solar. Though it’s not yet widely available in the U.S., McKibben pointed to the style’s popularity in Europe and Australia.

“Americans spend three or four times as much money as Australians or Europeans to put solar panels on the roof. We have an absurdly overcomplicated permitting system that’s unlike anything else on the rest of the planet,” McKibben said.

McKibben said Australians can obtain three hours of free electricity each day through a government program because the country has built so many solar panels.

“And I’m almost certain that that’s an argument that every single person in America would understand,” he said. “I don’t know anyone who wouldn’t say: ‘I’d like three free hours of electricity.’”

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Swinhart reported from Vermont. Borenstein reported from Washington. Matthew Daly contributed to this report from Washington.

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The Associated Press’ climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.



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Epstein files fight in court heats up as congressmen accuse DOJ of ‘serious misconduct’

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Manhattan’s top federal prosecutor said Friday that a judge lacks the authority to appoint a neutral expert to oversee the public release of documents in the sex trafficking probe of financier Jeffrey Epstein and British socialite Ghislaine Maxwell.

Judge Paul A. Engelmayer was told in a letter signed by U.S. Attorney Jay Clayton that he must reject a request this week by the congressional cosponsors of the Epstein Files Transparency Act to appoint a neutral expert.

U.S. Rep. Ro Khanna, a California Democrat, and Rep. Thomas Massie, a Kentucky Republican, say they have “urgent and grave concerns” about the slow release of only a small number of millions of documents that began last month.

In a filing to the judge they said they believed “criminal violations have taken place” in the release process.

Clayton, though, said Khanna and Massie do not have standing with the court that would allow them to seek the “extraordinary” relief of the appointment of a special master and independent monitor.

Engelmayer “lacks the authority” to grant such a request, he said, particularly because the congressional representatives who made the request are not parties to the criminal case that led to Maxwell’s December 2021 sex trafficking conviction and subsequent 20-year prison sentence for recruiting girls and women for Epstein to abuse and aiding the abuse.

Khanna said Clayton’s response “misconstrued” the intent of their request.

“We are informing the Court of serious misconduct by the Department of Justice that requires a remedy, one we believe this Court has the authority to provide, and which victims themselves have requested,” Khanna said in a statement.

“Our purpose is to ensure that DOJ complies with its representations to the Court and with its legal obligations under our law,” he added.

Epstein died in a federal jail in New York City in August 2019 as he awaited trial on sex trafficking charges. The death was ruled a suicide.

The Justice Department expects to update the court “again shortly” regarding its progress in turning over documents from the Epstein and Maxwell investigative files, Clayton said in the letter.

The Justice Department has said the files’ release was slowed by redactions required to protect the identities of abuse victims.

In their letter, Khanna and Massie wrote that the Department of Justice’s release of only 12,000 documents out of more than 2 million documents being reviewed was a “flagrant violation” of the law’s release requirements and had caused “ serious trauma to survivors.”

“Put simply, the DOJ cannot be trusted with making mandatory disclosures under the Act,” the congressmen said as they asked for the appointment of an independent monitor to ensure all documents and electronically stored information are immediately made public.

They also recommended that a court-appointed monitor be given authority to prepare reports about the true nature and extent of the document production and whether improper redactions or conduct have taken place.



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See the face of ICE’s crackdown on normal Americans: a 21-year-old college student permanently blind in one eye

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A 21-year-old college student who said he was blinded in one eye by a projectile fired by a federal officer during a Southern California protest said he faces a drastically different life now.

Kaden Rummler said in an interview that he was in agonizing pain and underwent an extensive six-hour surgery to his left eye after he was injured at a Jan. 9 protest over the fatal shooting of a woman by an Immigration and Customs Enforcement officer in Minneapolis. Rummler said he has no depth perception and can no longer drive. Shards of metal and a nickel-sized piece of plastic remain lodged in his skull, his attorney said, and he is considering suing.

“It’s going to affect every aspect of my life,” said Rummler, who hopes to pursue a career in forestry.

A second demonstrator at the same protest outside a federal immigration building in Orange County told the Los Angeles Times he was also blinded in one eye by a projectile fired by federal agents. Britain Rodriguez, 31, said he was standing on steps outside the immigration building when he was struck in the face.

“I remember hitting the ground and feeling like my eye exploded in my head,” Rodriguez told the newspaper.

The Department of Homeland Security didn’t respond to questions from The Associated Press about what type of projectile was used. Tricia McLaughlin, assistant secretary for the agency, said in an emailed statement this week that the protesters were violent and that two officers were injured but didn’t specify the extent of their injuries. DHS said one demonstrator was taken to the hospital with a cut. McLaughlin confirmed to the Times that was a reference to Rummler and called his injury claims “absurd.”

Rummler has been charged with a misdemeanor count of disorderly conduct. One of his fellow protesters was jailed for several days and has been charged with assaulting, resisting or impeding a federal officer.

Rummler’s attorney John Washington said doctors want to know whether the materials in the projectile could be toxic but have been unable to get answers from DHS. Washington said based on their preliminary investigation they believe it was a capsule made from metal and plastic containing pepper spray.

The injuries in California are the latest in a growing number of violent encounters between federal agents and community members during protests over the Trump administration’s immigration crackdown.

Federal immigration agents deployed to Minneapolis have used aggressive crowd-control tactics that have become a dominant concern after the deadly shooting of Renee Good.

In Santa Ana, California, hundreds of people marched in the streets on Jan. 9 to protest Good’s killing. A smaller group later congregated outside the federal immigration building, shouting expletives through megaphones about ICE, according to video taken by OC Hawk, a group that films breaking news in Orange County.

The video shows a handful of officers in riot gear standing guard and urging demonstrators to move back. An orange cone is later seen rolling onto a plaza outside the building, and authorities begin firing crowd-control projectiles as they walk toward the crowd.

In the video, an officer is seen grabbing a protester by the arm and Rummler and a few others are seen stepping forward shouting in response. An officer then fires a crowd-control weapon, striking Rummler from several feet away. Rummler grabs his face and falls to the ground, and an officer grabs him by the shirt and drags him backward across the ground toward the building, the video shows. Later, video appears to show him face down on the ground being handcuffed.

Rummler said he joined the protest against immigration authorities because he can’t stand seeing families torn from their homes. Despite his injuries, he said he would do it again.

“I refuse to sit around idly and watch that happen, and in 50 years, I would absolutely regret not trying to make a change,” he said.

Washington, a civil rights lawyer, said his client could have been killed.

“Any officers with just the most basic training would know you don’t shoot someone ever in the face with this, but let alone at point-blank range, and that’s because it is a lethal weapon when used like that, and it very nearly was,” Washington said.

Geoffrey Alpert, a professor of criminology and criminal justice at University of South Carolina, said a thorough investigation is needed into the reason for using a high level of force in that situation.

“I don’t know of any projectile where you train to shoot at that close range,” Alpert said.



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