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Musk and DOGE Are Following the Big Tech Playbook: Use AI to Justify Mass Layoffs
The message these tactics send is clear: Decades of public service experience can be dismissed in minutes if an AI system suggests your role is redundant.
Feb 27, 2025
Earlier this month, software firm Workday announced that it would be laying off more than 1,700 workers—or about 8.5% of its workforce—to redirect investment toward artificial intelligence. The announcement was the latest in a series of mass layoffs that have put hundreds of thousands of workers at Amazon, Intel, Microsoft, and other tech companies out of work over the past several years. Google and Meta are among the tech giants that have cited the need to invest resources in AI development as the reason for cutting jobs. AI is also a part of the rationale behind the raft of mass federal employees layoffs.
Much of the narrative about AI and jobs has focused on the threat of automation: What can AI do as well as—or better than—humans? Research on AI-driven job displacement often focuses on forecasting which jobs or tasks machines could perform in the future, and then estimating how many workers might be displaced due to this automation. A report might tell us that 30% of work hours could be automated by 2030, or a study might predict that 5% of work tasks across the economy could be performed by AI in the next 10 years.
While automation is a risk that needs to be understood and taken seriously, this framing misses a key aspect of what's happening in the economy now. After many tech firms overhired during the pandemic, companies are cutting jobs and investing in AI not to directly replace workers with machines, but to signal to investors that they're focused on future growth and profitability.
Fortunately, workers and unions are fighting back, both against AI-driven job displacement in private industry and against DOGE's attempts to dismantle the public service.
Mass layoffs are nothing new. As Les Leopold argues in his book Wall Street's War on Workers, for decades corporations have carried out mass layoffs not out of fiscal desperation, but as part of a strategy to further enrich wealthy shareholders through stock buybacks and leveraged buyouts. But now we are seeing how AI hype has become the latest justification for firing workers en masse. Tech firms aren't waiting around to see what roles AI can and can't replace before laying workers off. Instead, they're slashing jobs and redirecting resources to AI initiatives because the mere promise of AI-driven efficiency is enough to excite investors and drive up stock prices.
This strategy creates a self-fulfilling prophecy where tech firms devalue human labor to make automation seem inevitable. By carrying out mass layoffs, tech firms signal to investors and workers themselves that workers are replaceable. By reinvesting those resources in AI, firms make it more likely that AI will eventually become capable enough to replace the workers they already decided to eliminate.
The strategy of hyping AI to justify mass layoffs is exemplified by Swedish tech firm Klarna. As Noam Scheiber reports in The New York Times, when the company laid off 700 customer service workers last year, CEO Sebastian Siemiatkowski didn't just announce the cuts—he celebrated them. In media appearances and investor calls, Siemiatkowski proudly predicted that the company's workforce would eventually shrink to less than half its size thanks to AI-enabled productivity gains. As Scheiber reports, Siemiatkowski may even have overstated Klarna's progress in automating jobs to try to make the company more appealing to investors. For example, while the CEO claimed that AI enabled the company to become so efficient that it halted all new hiring a year and a half ago, journalists have found that the company continues to post job listings for vacant positions. The Klarna example shows how, for some companies, automation isn't just about replacing workers with machines; it is about redefining human labor as a temporary necessity to be tolerated until AI makes it obsolete. Like many tech firms, Klarna is betting that by hyping AI's potential while disinvesting in workers, they can make their vision of an automated future into a self-fulfilling prophecy.
Elon Musk's so-called Department of Government Efficiency( DOGE) is now bringing the AI-fueled mass layoff strategy to the federal government. Through DOGE, Musk and his allies are experimenting with AI tools "to identify budget cuts and detect waste and abuse," in agencies like the Department of Education and the General Services Administration (GSA). Staffers report that DOGE aims to reduce GSA's budget by up to 50%. As The Washington Post reports, "DOGE associates have been feeding vast troves of government records and databases into artificial intelligence tools, looking for unwanted federal programs and trying to determine which human work can be replaced by AI, machine-learning tools, or even robots." In other words, Musk is exploring how he can use AI as justification for carrying out mass layoffs across the federal government. The message these tactics send is clear: Decades of public service experience can be dismissed in minutes if an AI system suggests your role is redundant.
The DOGE-led mass layoffs are part of a decades-long conservative project of shrinking the federal workforce and weakening the administrative state. But what's new is how AI hype, and the guise of Silicon Valley efficiency, is being used to add a veneer of technological inevitability to this political project. "The federal government is suddenly being run like an AI startup," writes Kyle Chayka in a recent piece in The New Yorker. When DOGE staffers cite AI assessments as justification for eliminating positions, they're following the same playbook as tech CEOs: using speculative claims about AI capabilities to make workforce reduction seem like an unavoidable consequence of progress rather than a deliberate choice. DOGE's promises of AI-driven efficiency mask the reality that many government functions still require human judgment, institutional knowledge, and public service experience that no algorithm can replace. This combination of hostile management and AI hype isn't just about cutting costs—it's about redefining public service as something that can be evaluated by an algorithm and eliminated at the whims of a tech oligarch.
Fortunately, workers and unions are fighting back, both against AI-driven job displacement in private industry and against DOGE's attempts to dismantle the public service.
Workers are successfully using collective action to establish guardrails around AI usage and ensure technology serves rather than replaces human labor. The nearly five-month strike by the Writers Guild of America (WGA) and the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) in 2023 was motivated in large part by concerns that Hollywood studios would seek to use AI in ways that undermine workers or replace them altogether. SAG-AFTRA and WGA eventually won contracts that established frameworks for how studios can and cannot use AI during the production process, ensuring that AI cannot replace human writers and actors without their consent and fair compensation. As labor journalist Alex Press reports, similar fights have played out across workplaces in the hospitality, tech, and logistics industries. Through effective strikes and collective bargaining, workers can influence how AI is implemented in the workplace, and secure protections against mass layoffs.
Unions representing federal employees are also mounting a host of legal challenges to protect workers and preserve government services. The American Federation of Government Employees (AFGE) and several other unions filed suit to block what it called "arbitrary and capricious" job cuts laid out in the Trump administration's federal worker buyout program. Meanwhile, the National Treasury Employees Union, which represents workers at the Consumer Financial Protection Bureau, has filed a lawsuit challenging Trump's directive to halt the bureau's operations, which the union alleges violates the constitutional separation of powers. While not directly a response to DOGE's use of AI, the lawsuits show how unions are taking action to oppose efforts to weaken federal agencies and devalue the work of career civil servants. As DOGE looks to use AI to justify mass layoffs, these lawsuits could establish important legal precedents to help protect workers from arbitrary dismissal based on algorithmic assessments.
Recent job cuts in the tech sector and in the federal government show how AI hype is being used to justify mass layoffs. Through collective action, workers are showing that AI's impact isn't predetermined by technology—it can be shaped through worker power.
This article first appeared on Power at Work and is republished here with permission.
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Video Game Actors Strike for AI Protections
"The video game industry generates billions of dollars in profit annually," said one union leader. "The driving force behind that success is the creative people who design and create those games."
Jul 25, 2024
After nearly two years of negotiations with video game giants and no deal that would protect performers from artificial intelligence, unionized voice and motion capture actors who work in video game development announced Thursday that they will go on strike starting at 12:01 am on Friday, July 26.
The performers are represented by Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA), which last year won a contract for TV and film actors that included "unprecedented provisions for consent and compensation that will protect members from the threat of AI," after the union went on strike for four months.
The union has been negotiating on behalf of video game actors with major production companies including Disney Character Voices Inc., Activision Productions Inc., and WB Games Inc., and has won concessions over wages and job safety—but "AI protections remain the sticking point," said SAG-AFTRA on Thursday as the impending strike was announced.
Unionized actors want protections that would stop video game companies from training AI to replicate actors' voices or likeness without their consent and without compensating them.
"The video game industry generates billions of dollars in profit annually," said Duncan Crabtree-Ireland, national executive director and chief negotiator for SAG-AFTRA. "The driving force behind that success is the creative people who design and create those games. That includes the SAG-AFTRA members who bring memorable and beloved game characters to life, and they deserve and demand the same fundamental protections as performers in film, television, streaming, and music: fair compensation and the right of informed consent for the AI use of their faces, voices, and bodies."
"Frankly, it's stunning that these video game studios haven't learned anything from the lessons of last year—that our members can and will stand up and demand fair and equitable treatment with respect to AI, and the public supports us in that," he added.
Sarah Elmaleh, negotiating committee chair for the union's interactive media agreement, said the negotiations have shown the companies "are not interested in fair, reasonable AI protections, but rather flagrant exploitation."
"We look forward to collaborating with teams on our interim and independent contracts, which provide AI transparency, consent, and compensation to all performers, and to continuing to negotiate in good faith with this bargaining group when they are ready to join us in the world we all deserve," said Elmaleh.
The unionized actors voted in favor of the strike authorization with a 98.32% yes vote, said SAG-AFTRA.
The strike was announced as more than 500 workers who help develop the popular World of Warcraft video game franchise voted to join the Communications Workers of America (CWA), with the games publisher, Blizzard Entertainment, recognizing the bargaining unit.
CWA noted that the workers' journey to union representation began with a walkout in 2021 at Activision Blizzard, which was later bought by Microsoft, over sexual harassment and discrimination.
"What we've accomplished at World of Warcraft is just the beginning," Eric Lanham, a World of Warcraft test analyst, said in a statement. "We know that when workers have a protected voice, it's a win-win for employee standards, the studio, and World of Warcraft fans looking for the best gaming experience."
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Number of US Workers Who Joined Major Strikes Surged by 280% in 2023
"From the United Auto Workers to nurses across the country, these strikes provided critical leverage to workers to secure better wages and working conditions," said one expert.
Feb 21, 2024
While federal data released on Wednesday shows nearly half a million workers last year participated in 33 major work stoppages—the most since the turn of the century—labor experts still stressed the need for more policies protecting the right to strike.
The Bureau of Labor Statistics noted that there has been an average of 16.7 U.S. work stoppages with more than 1,000 strikers over the past two decades, meaning last year's number was almost double the norm. BLS also said that 458,900 workers joined the 2023 strikes, and nearly 87% of them work in service-providing industries, including 188,900 with jobs in education and health.
In their analysis of the data, also published Wednesday, Margaret Poydock and Jennifer Sherer of the Economic Policy Institute (EPI) pointed out that "this is an increase of over 280% from the number of workers involved in major worker stoppages in 2022, which was 120,600. Further, it is on par with the increase seen in pre-pandemic levels during 2018 and 2019."
Poydock, a senior policy analyst at the think tank, said in a statement that "a surge of workers went on strike in 2023 to fight back against record corporate profits, stratospheric CEO pay, and decades of stagnant wages. From the United Auto Workers to nurses across the country, these strikes provided critical leverage to workers to secure better wages and working conditions."
Other notable actions include the actors' and writers' strikes that together effectively shut down television and film production for months. A report released last week by researchers at Cornell University and the University of Illinois—who, unlike the BLS, also tracked smaller U.S. actions—tallied 466 strikes and four lockouts involving a total of 539,000 workers.
"It's a historic moment for the labor movement," declared Robert Reich, a former U.S. labor secretary who is now a University of California, Berkeley professor. "Workers are done letting billionaires and corporations hoard all the wealth and power."
As Poydock and Sherer, EPI's State Worker Power Initiative director, wrote in their report:
It should be no surprise that workers are taking collective action to improve their pay and working conditions—but we should be asking why it is happening now. The U.S. economy has churned out unequal income growth and stagnant wages for the last several decades. Research shows that unions and collective bargaining are key tools in combating income inequality and improving the pay, benefits, and working conditions for both union and nonunion workers. However, the continued rise in collective action is not likely to increase unionization substantially unless meaningful policy change is enacted to ensure all workers have the right to form unions, bargain collectively, and strike.
The BLS said last month that "the union membership rate—the percent of wage and salary workers who were members of
unions—was 10% in 2023, little changed from the previous year."
"In the public sector, both union membership and the union membership rate (32.5%) were little changed over the year," the bureau added. "The number of union workers employed in the private sector increased by 191,000 to 7.4 million in 2023, while the unionization rate was unchanged at 6%."
Stressing that "the increase in major strike activity in 2023 occurred despite our weak and outdated labor law failing to protect workers' right to strike," Sherer argued that "federal and state action is needed to ensure the right to strike."
At the federal level, EPI supports several proposals. As Poydock and Sherer detailed:
- The Richard L. Trumka Protecting the Right to Organize (PRO) Act includes critical reforms that would strengthen private sector workers' right to strike. The PRO Act would expand the scope for strikes by eliminating the prohibition on secondary strikes and allowing the use of intermittent strikes. It would also strengthen workers’ ability to strike by prohibiting employers from permanently replacing striking workers.
- The Striking and Locked Out Workers Healthcare Protection Act would prevent employers from cutting off health coverage of workers and family members in retaliation against striking workers.
- The Food Secure Strikers Act would allow striking workers to qualify for Supplemental Nutrition Assistance Program (SNAP) benefits.
- Congress should also pursue policies that extend a fully protected right to strike to railway, airline, public sector, agricultural, and domestic workers. None of these workers has the fundamental right to strike under current federal law.
"Right now, only a dozen states grant limited rights to strike to some public sector workers," the pair also highlighted. "States should also join New York and New Jersey in making striking workers eligible for unemployment benefits."
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