Artificial intelligence has fueled a bull run in stocks that has taken the broader market to new heights. Companies that have committed layoffs to new technologies, however, don’t always fare so well.
CNBC compiled a list of 23 S&P 500 firms across multiple sectors and industries to see how their stocks fare following AI-linked layoffs. In particular, we looked for companies that clearly expressed artificial intelligence or mentioned increased use of technology when they announced layoffs.
As of May 15, 13 of those companies, or 56%, have traded in the red since their announcement. For companies whose shares fell after AI-related layoffs, the average drop was nearly 25%.
The shoe giant Nike cut nearly 800 jobs in January, citing a plan to accelerate “automation” at its US distribution centers. As of May 15, the stock has traded down nearly 35% since the layoff.
Likewise, Salesforce has shed nearly 32% since news of its AI-driven layoffs became public late last summer. The customer relationship management company cut 4,000 jobs in September, noting that its AI-powered team of customer service bots called “Agentforce” replaced some engineers.
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Later that month, the online marketplace Fiverr it also laid off 30% of its workforce to become “the first lean, agile AI company with a modern AI-focused technology infrastructure” and a smaller team, according to CEO Micha Kaufman. The stock is down 54% since then through May 15.
Although it’s only a small sample, the data underscores an uncomfortable truth: Investors don’t know what to make of AI and its potential impacts, even as the technology’s use increases, Daniel Keum, associate professor of management at Columbia Business School, told CNBC.
“AI is kind of what we call a big shock,” Keum said. “There’s a lot of uncertainty about what it’s going to do. No one really understands it well… [its] long-term impact.”
What is certain is that AI is used to reduce labor costs in “the majority” of cases, although technology makers are proposing other applications of their own, he said.
“There is no summary of productivity gains, which means yes … I am using new technology … to reduce labor … but my competitors are doing the same,” Keum said. “If everyone improves, then the bottom line changes and no one has a big advantage.”
Suspect AI?
As AI has attracted talk, so has the idea that companies can use the technology to eliminate jobs and cut costs.
According to one estimate, at least 112,000 job losses can be linked to the adoption of AI from the beginning of 2025. In a study released in November, the Massachusetts Institute of Technology also found that AI can already automate 11.7% of the US labor market and save companies up to $1.2 trillion in wages in various fields.
However, investors have found it difficult to see whether firms are actually making AI-based decisions or using the technology as a way to explain old cost or balance sheet mistakes, according to Ally Warson, a partner at AI-focused firm UP.Partners.
The concept is so popular with investors and other members of the public that it even has a name: “AI washing.”
“Companies will use anything in the media or an accepted story to cover up why they’re not selling people,” Warson told CNBC.
Investors are also grappling with how to gauge the impact of AI on companies as many national and macroeconomic issues also weigh on their stock, according to Keum.
“Major global shocks” such as the Iran war have led to layoffs, and President Donald Trump’s tariffs unveiled last year have added pressure to cut costs, Keum said. Also, the elimination of overemployment during the pandemic is also still in play.
“Then, there’s the real shock of AI,” Keum said. “How much we can explain to each other … is anyone’s guess.”
‘Job cuts are not enough’
Amid that uncertainty, investors are looking beyond layoffs to other ways AI can improve bottom lines, according to Noah Hamman, CEO and founder of investment management firm AdvisorShares.
“The job cuts are not enough,” Hamman said. “People look at what… [companies are] spending money and trying to figure out who’s going to get the best return on all that investment.”
The investor cited Google, which is owned by publicly traded companies Alphabetsas an example of a firm growing its business with AI. Its artificial intelligence tool Gemini has contributed to cloud revenues, strengthened search and fostered user engagement in the Google ecosystem, he noted.
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The emerging technology also powers robots designed for manufacturing, factories and construction companies, according to Warson, who invests in virtual reality AI startups. Those robots can perform dangerous tasks like window washing or wind turbine inspections to improve efficiency and reduce costly workplace injuries, potentially boosting businesses’ bottom lines.
However, one thing is clear: Layoff announcements linked to the increased use of artificial intelligence may not be enough to boost a company’s stock price — at least not for long.
