A European Central Bank analysis suggests the narrative of widespread AI-driven job losses may be misleading. Data indicates European companies that deploy or invest in AI are slightly more likely to be hiring than those that do not.
This contrasts with recent major layoffs at tech firms like Block, Amazon, and Microsoft, where AI efficiency is often cited as a reason for cuts. The ECB economists posit that if AI were delivering major productivity gains, firms would likely be expanding, not contracting, their workforces.
The overall impact of AI on net employment currently appears limited, with no significant difference in job creation between AI-users and non-users. However, the data shows a positive, if small, correlation between heavy AI use/investment and hiring, particularly for innovation-focused roles.
Main Topics: Conflicting narratives on AI's impact on jobs; European data showing a slight positive hiring correlation for AI-adopting firms; examples of major tech layoffs attributed to AI; analysis suggesting AI's current net employment effect is neutral to slightly positive.
AI creates jobs, data from bank survey shows — companies with wide AI deployments and investments are more likely to be hiring than those that don't
European data suggests the firms making the most use of AI are actively hiring more people, too.
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It was just last week when Twitter founder, Jack Dorsey, laid off 4,000 workers from his Block financial services provider, shedding around 40% of the global workforce in one stroke. The given reason? AI.
"We’re already seeing it internally. A significantly smaller team, using the tools we’re building, can do more and do it better," Dorsey said at the time. "And intelligence tool capabilities are compounding faster every week."
"To those staying…i made this decision, and i'll own it," he said.
we're making @blocks smaller today. here's my note to the company.####today we're making one of the hardest decisions in the history of our company: we're reducing our organization by nearly half, from over 10,000 people to just under 6,000. that means over 4,000 of you are…February 26, 2026
The buck may stop with Dorsey, but it also comes coated in "AI washing," as OpenAI CEO Sam Altman has publicly called it. Block had an enormous exposure to Bitcoin, which has lost around half its value over the past six months; Block's share price has fallen by 35% since October. That stock price reversed sharply after the layoff announcement, jumping over 20% in the days that followed.
Other major American tech companies have also laid off thousands of employees over the past year, with AI efficiency and productivity improvements often cited as the main reason. Amazon has shed tens of thousands of workers, and Microsoft thousands of its own. Salesforce also cut 4,000 customer support staff in 2025, after the CEO suggested AI was doing close to half their work.
But is that accurate?
Big excuses with little evidence
The fears over AI job market decimation may be overblown, according to economists working at the European Central Bank. Despite a claimed 1,110 increase in AI-driven layoffs in 2025, the technology isn't thinning workforces — and may even be expanding them, according to an ECB blog entry. It suggests firms that make the most use of AI in Europe are also the largest job creators, hiring more people as productivity increases.
Companies that deployed AI at a large scale were 4% more likely to be hiring than those that did not, according to the post. Companies that also invest in the AI industry are 2% more likely to be hiring new staff, indicating that the AI-driven layoff narrative may be a scapegoat for other factors, something that
While the figures are not enormous, they are notable, as they suggest that companies that deploy or invest in AI are finding ways to improve profitability and bring on new workers. There may not be an AI-powered wave of productivity boosts as many had hoped, the results certainly betray some of the claims made by leadership in big tech firms.
The European Central Bank economists claim that if AI-related productivity boons were helping companies, they'd be building headcounts, not contracting them.
A positive, if limited impact
The largest takeaway from the ECB economists' research is that AI just hasn't made much of an impact: "Overall, in terms of job creation and destruction, we find no significant difference between businesses that report using AI and those that don’t," they said.
When digging into the data, companies with the greatest AI use and investment were slightly more likely to take on new workers, compared to those that didn't use AI. This isn't an enormous trend, but it's the absolute opposite of the story being told by many of the companies instigating recent tech layoffs.
"The overall growth in employment is driven by firms that use AI to promote research and development (R&D) and innovation — key determinants of business growth," the ECB economists argue.
Although they admit they can't categorize the kind of employees that companies invested in and using AI are hiring, they are certainly hiring for AI-related R&D, and therefore are likely to be taking them on for skilled positions.
This backs up a recent report that many AI layoff claims are bogus, with poor business practices and over-hiring post-pandemic being the key drivers of layoffs. Recent surveys of tech leaders also found that over 80% of companies using AI heavily have found little to no productivity gains.
It's more complicated than that
So why isn't AI driving the productivity explosion disruption that AI companies promise? Why aren't small teams of single individuals offering leaner, more efficient alternatives to the gargantuan software giants who are idle and sluggish in comparison?
Because it's just not that simple.
Sure, there are a few instances of individuals using AI to write scripts for videos, and then AI to make those videos, and AI to voice those videos: AI slop factories are running rampant. Hackers are using AI to accelerate their research and find new attack vectors to make them more effective, and the world of software development is shifting around tools like Claude Code.
But for those employed at large companies looking to use AI, the technology just isn't the magic bullet it's being sold as. Vibe-coded apps and services often contain bugs and compliance issues, AI-written articles make up quotes, and AI military targeting software makes egregious errors that cost real lives, reports Nature.
So, while some claim that AI tools are driving layoffs, that's just not what the data is telling us. Instead, businesses are using AI as a scapegoat to excuse poor business decisions, a reaction to global trade and economic disruption, and a desperate cover story for AI investments that have yet to pay off for anyone but Nvidia.
The ECB report's conclusion is clear: "As things stand, based on firms’ overall hiring plans, investment in and the intensive use of AI are not yet replacing jobs."
The "Yet" in that sentence is doing a lot of heavy lifting, but the ECB's economists aren't the first to draw this conclusion, and there's a growing body of evidence that if the AI productivity boon was coming down the pipe, it would have started to show up by now.
And it just hasn't.
Jon Martindale is a contributing writer for Tom's Hardware. For the past 20 years, he's been writing about PC components, emerging technologies, and the latest software advances. His deep and broad journalistic experience gives him unique insights into the most exciting technology trends of today and tomorrow.
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