Wix cuts 20% of staff citing AI, but MIT professor says companies have blamed external forces for layoffs for decades as a cover story.

Wix CEO Avishai Abrahami announced layoffs of roughly 20% of its staff, or just over 1,000 people based on a May SEC filing showing 5,277 employees. He cited both the strengthening of the Israeli shekel against the U.S. dollar and AI as reasons, framing AI as 'the most significant shift in how companies are built since the invention of modern programming languages in the 1970s.'

Paul Osterman, a professor emeritus of human resources management at MIT Sloan School of Management, argues that companies have been pursuing smaller and flatter teams for 20 years, but are now using AI as a cover story for layoffs—a practice he calls 'AI washing.' After Cisco announced 4,000 layoffs, its stock jumped 13%.

Osterman notes that disposable workers (contractors, freelancers, and gig workers) now make up an estimated 35% of the American workforce. These workers face lower wages and lower job satisfaction than standard employees and are less willing to go above and beyond for their employers.