AI Is Now the Top Reason Companies Give for Layoffs. Redesign the Work First.

Last Wednesday I sat down with the team at a marketing strategy firm in Dallas, and within ten minutes we were talking about the question every one of our clients keeps asking: how are we going to use AI? What’s the AI strategy?

I told him what I tell them. I think that’s the wrong place to start.

The next morning, American Express told investors it would cut about 5% of its workforce. Its CFO said the goal was to be “leaner, more agile, and also to prepare for AI,” and then added the line I wish every CEO would tape to the wall: “You don’t want to automate processes that are not optimally structured” (CNBC, October 23, 2026).

AI is now the reason companies give most for cuts

Challenger, Gray & Christmas tracks every layoff announcement in the country. Through September, employers had announced 573,195 job cuts in 2026, and AI was the stated reason for 120,136 of them, about 21%, more than any other reason this year (Challenger, October 1, 2026). That counts what companies say in the announcement, not what caused it, and the difference matters.

Meanwhile the people who stay are watching. Gallup found that 27% of U.S. workers now fear technology will make their job obsolete, a record, and double the share in 2017 (Gallup, September 15, 2026).

Most companies are using AI. Very few are changing the work.

Wharton’s 2026 AI adoption report found that only 7% of organizations succeed on all three of the things that make AI pay off: value, workflow and alignment. Leaders and employees don’t even agree on what has changed. 73% of leaders say workflows have changed significantly, against 58% of the people doing the work (Knowledge at Wharton, October 13, 2026).

That gap is what happens when AI gets handed to the IT department. In some of our larger clients it sounds like this: hey, IT, we need you to figure out how to use AI for us. Wrong place to start. IT can architect the technology. Only the CEO can architect the enterprise, which is why we wrote the CEO is the AI architect.

Where to start instead

What are we trying to accomplish? Name the two or three results that matter most this year. AI is a tool for getting there, the same way culture and great leaders are.

What are the biggest problems in the way? Ask the people closest to the work. They know where the hours go.

What is the redundant work? Every company has reports nobody reads, handoffs that exist because two systems don’t talk and approvals that protect nobody. That is where AI pays first.

Redesign the workflow with the people who do it. Then decide which tasks AI takes, which a person keeps and who is accountable for the result. Only after that does anyone talk about roles.

We tried it on ourselves first

This fall Brittany and I rebuilt the Everest website and our own CRM with AI. Without it, I’d have guessed six to twelve months and at least a hundred thousand dollars. We built it in two weeks for about a hundred dollars a month in AI credits.

That number leaves out the most important part. Over the past eighteen months, our firm has spent hundreds of hours learning AI and what it means to be the AI architect as a CEO, a founder and an owner. We have invested tens of thousands of dollars learning from people further down the road and putting the tools to work. The two weeks were possible because of the eighteen months.

And even then, we didn’t start with “how do we use AI.” We started with what we were trying to accomplish and the work that was in the way.

If you want to see where your company stands, the AI Readiness Check takes five minutes and shows every result with no email required. And if you lead a company in Dallas–Fort Worth, the AI Architect Mastermind is a room full of CEOs and owners doing this with their own hands.

Before anyone in your company writes “AI” in a layoff memo, ask the harder question first: have we redesigned the work?