Layoffs will come in 2027, but AI will be more an excuse than a cause, says a Seeking Alpha analyst

By Seeking Alpha · October 26, 2026.

Bret Jensen, an analyst and investor who writes for Seeking Alpha, argues that US layoffs will accelerate in 2027 and that, whatever corporate leaders say, AI won't be the main cause. This is one author's opinion, not official data or a study.

He describes the 2026 US labor market as a "no hire, no fire" environment. Weekly unemployment claims are hovering near their lowest levels in generations, and labor force participation remains well below its historical highs.

Jensen argues that job losses attributable to AI are still limited. In his view, many companies cite AI as a margin-boosting justification rather than as a real displacement of workers.

The second pillar of his thesis is financial. He notes that hyperscalers such as Oracle and Microsoft face rising capital expenditure, negative free cash flow and skepticism in debt markets, even as they keep building AI infrastructure. He also cites a $95 billion secondary offering from Meta and slower growth in AI infrastructure as possible drags on the stock-market wealth effect and on future job creation. The publicly available summary doesn't spell out the figures or sources behind these points, so they are best taken as the author's interpretation rather than verified facts.

**Our take.** The thesis has a valuable core: "AI is taking our jobs" is a convenient explanation for almost any cut. If a company needs to restore margins because its data-center investment isn't paying off, blaming AI for the cuts sounds more modern than admitting to a balance-sheet problem. It's a variant of what is commonly called "AI washing": using AI as a narrative alibi.

But it's important not to overcorrect. The fact that measurable displacement is limited today doesn't mean it will stay that way. Both forces can coexist: an investment cycle that squeezes the books and genuine automation of coordination and support roles, which is where we are already seeing the first cuts. Separating how much is due to each is difficult, and not even institutions know how to measure it well in aggregate employment.

For readers, the practical lesson is about method. When a company announces layoffs "because of AI," look at its cash flow, capex and cost structure before buying the story. In the short term, the transition will be hard and uneven, and worse if it coincides with an adverse financial cycle. In the long term, our thesis hasn't changed: the technology points toward an abundance that frees people from forced labor. But getting there requires honest diagnoses today, and understanding which cuts are structural and which are simply part of the economic cycle.