When company leaders explain major staff cuts to investors, it can sound savvy to claim AI flagged roles for elimination. But some are now asking whether “AI washing” masks poor planning or organizational problems, and how much it might harm employee relations if companies aren’t honest about the real reasons for layoffs.
Companies need to be careful, Bracewell’s David Shargel told SHRM. “They can face serious repercussions if financial regulators think that shareholders or the investing public have been misled.”
Employees tend to know to what extent their employers are using AI, Shargel said. So if a company blames layoffs on AI replacing staff roles – and workers haven’t seen the technology encroach on their day-to-day responsibilities – “that can certainly lead to mistrust,” he said.
