AI May Not Have Taken Your Job, But It Might Have Gotten Your Raise

A wave of layoffs at tech companies indicates AI is hurting the job market primarily by diverting funding away from headcount rather than directly replacing workers. That reallocation of capital toward AI projects could compress tech-sector payrolls, weigh on consumer spending tied to tech wages, and create downside risk to sector earnings and hiring-led growth.

Analysis

A wave of layoffs at tech companies indicates AI is hurting the job market primarily by diverting funding away from headcount rather than directly replacing workers. That reallocation of capital toward AI projects could compress tech-sector payrolls, weigh on consumer spending tied to tech wages, and create downside risk to sector earnings and hiring-led growth.