Overview
- Investor reaction has flipped as shares fall about 2% on average after layoffs pitched as automation or restructuring, with steeper drops when firms cite “restructuring.”
- Goldman reached its conclusions by matching layoff announcements to earnings-season commentary and subsequent stock performance across public companies.
- Companies announcing cuts showed higher capex, debt and interest expense growth alongside weaker profit growth than industry peers, signaling cost pressure as a likely motive.
- Goldman flags a potential rise in layoffs into 2026 based on management guidance that highlights using AI to reduce labor costs.
- A separate Goldman analysis finds AI’s role in 2025 job cuts remains modest economy-wide, though companies emphasizing AI have sharply curtailed job postings.