In recent months nearly every tech layoff announcement includes the words 'artificial intelligence'. The company is 'focusing on AI', 'adapting its structure to the new era', 'investing in an agent platform'. Sometimes that is accurate. Sometimes it is what is called 'AI washing': using AI as a convenient explanation for steps driven mainly by other reasons.
The term borrows from 'greenwashing', companies presenting themselves as greener than they are. AI washing comes in two versions. The first: companies presenting products as AI-based when AI plays a marginal role, to attract customers and investors. The second, relevant to the job market: companies attributing layoffs to AI because it sounds more forward-looking than 'our growth slowed' or 'investors want profits'.
Why does it happen? Because for a company, the AI explanation works well with markets. Investors reward companies that appear to embrace AI and improve efficiency. A 'layoffs due to difficulties' announcement drops the stock; a 'shift to AI' announcement can lift it. In Israel there is also local context: the strong shekel sharply raises payroll costs for companies that earn in dollars and pay in shekels. Cuts driven by that are easier to explain with AI than with the exchange rate.
How to tell? A few questions to ask when reading a layoff announcement. Does the company show a real AI product customers already use? Are cuts concentrated in roles AI actually replaces, or across the board? Has the company's growth slowed in recent quarters? And did it lay people off before AI became the reason? When the answers point to a business slowdown, AI is probably part of the story, but not all of it.
Why does it matter to employees? Because understanding the real cause changes decisions. If your role really is being replaced by AI, it is worth learning new skills and moving to fields where demand is growing, such as chips, infrastructure and cyber. If the cut stems from one company's business troubles, your skills may still be in high demand elsewhere. Either way, do not take the headline at face value.
