Many tech giants, including Microsoft, Snapchat and PayPal, have carried out significant layoffs this year. Some attribute these layoffs to efficiencies built during the pandemic or leveling off from strong growth in 2021. Others, like Google, claim it’s due to the adoption of AI and large language models.

Trends show the increase in layoffs within the tech industry does coincide with AI investments, contributing to the popular assumption that as AI grows, jobs will be lost. But when taking a closer look, I noticed that often companies aren’t decreasing their overall headcount; they’re cutting in some areas as they hire teams with new skills.

As a CEO, I know how hard it is to make these decisions—layoffs are never a first choice, and you may lay awake asking yourself what you could have done differently. While there are situations where workforce reduction is the right way to go, I believe a strategic approach to upskilling can help organizations avoid layoffs. By identifying and bridging skill gaps in advance and investing in upskilling aligned with current industry challenges, I have found that it’s possible to drive long-term growth and innovation while retaining vital organizational culture and knowledge.

Skills are evolving faster than ever—and it’s more difficult for business leaders to keep up.

It’s no secret that AI is reshaping roles across industries. New technologies are taking over manual tasks and even more advanced roles, like research and coding, that were once considered to be secure career paths. With this shift, the shelf-life of skills is plummeting—by some estimates to less than five years.

With all of this transformation, forecasting the future is becoming increasingly challenging, and some leaders are resorting to tactics like "fire and hire," firing people viewed as unsuitable for the evolving landscape while hiring fresh talent with AI-based skills. This was recently evident in Grammarly’s layoffs.

However, relying on recruitment to address AI skill shortages is not always the best solution. Not only is it expensive and disruptive to teams, but there’s also no guarantee that AI talent will be available in the job market.

While AI adoption negatively affects some existing jobs, it also drives demand for related skills. I believe this gives businesses a unique opportunity to strategically upskill their existing workforce rather than simply cutting people to be employed elsewhere and losing valuable company knowledge in the process.

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