CAMBRIDGE — Wix CEO Avishai Abrahami announced the company would cut roughly 20% of its workforce—just over 1,000 employees—based on its most recent Securities and Exchange Commission filing showing 5,277 staff. Block CEO Jack Dorsey also announced 4,000 layoffs, saying the cuts would help create “smaller and flatter” teams and a “new way of working.” Executives at Snap and Atlassian have used similar reasoning to justify recent workforce reductions.
Abrahami described artificial intelligence as “the most significant shift in how companies are built since the invention of modern programming languages in the 1970s” and said Wix needed to adapt “to become a faster, leaner, and flatter organization.”
Paul Osterman, professor emeritus of human resources management at the MIT Sloan School of Management, criticized this trend, arguing that companies are using AI as a pretext for layoffs—a practice he calls “AI washing.” “AI is a perfect excuse to justify big layoffs. It makes it seem as if it’s not our decision, our fault—it’s the technology,” Osterman said. He added, “They’ve been saying that for 20 years.”
Osterman argued that some companies are quietly admitting they do not want more workers and are instead using technological shifts as cover. He said firms often lay off employees they intended to cut during economic downturns, using AI as a convenient justification. According to Osterman, this pattern reflects a decades-long shift toward what he estimates are “disposable workers” who now make up 35% of the American workforce.
Osterman’s research indicates that contractors and marginal workers typically receive lower wages and report lower job satisfaction compared to standard employees. He said the trend of favoring disposable labor over stable employment has been intensifying, partly due to uncertainty surrounding AI. “We created a stable employment system of high wages and shared prosperity in the past. That’s what we should be thinking about doing now,” he said.
Federal data from the Bureau of Labor Statistics shows that in 2023, contingent workers—including contractors and temporary staff—numbered 6.9 million, or 4.3% of the U.S. workforce, up from 3.8% in 2017.