Artificial intelligence has ushered in a bull run in stocks that has taken the broader market to new heights. Companies that have tied workforce reductions to the new technology, however, haven't always fared so well.
CNBC compiled a list of 23 S&P 500 firms across multiple sectors and industries to see how their stocks fared following layoffs linked to AI. Specifically, we looked for companies that explicitly cited artificial intelligence or hinted at increased use of the technology when announcing the workforce reductions.
As of May 15, 13 of those companies, or 56%, have traded in the red from the time of their layoff announcements. For corporations whose shares fell after their AI-linked layoffs, the average decline was about 25%.
Footwear giant Nike cut nearly 800 workers in January, citing a plan to accelerate "automation" at its U.S. distribution centers. As of May 15, the stock was trading down nearly 35% from the time of its workforce reduction.
Similarly, Salesforce has shed about 32% since news of its AI-driven layoffs became public around the end of last summer. The customer relationship management company slashed head count by 4,000 workers in September, noting that its AI-powered team of customer service bots called "Agentforce" had replaced some support engineers.
Later that month, online marketplace Fiverr also laid off 30% of its staff to become "an AI-first company that's leaner, faster, with a modern AI-focused tech infrastructure" and a smaller team, according to CEO Micha Kaufman. The stock has plunged 54% from that time to May 15.
While only a small sample size, the data underscores an uncomfortable reality: Investors don't know what to make of AI and its potential impacts, even as usage of the technology widens, Daniel Keum, associate professor of management at Columbia Business School, told CNBC.
"AI is sort of what we call a sort of macro shock," Keum said. "There's a lot of uncertainty in what it will do. No one really has a good grasp of … [its] mid- to long-term impact."
What's certain is that AI is being used to cut labor costs in the "vast majority" of cases, despite makers of the technology touting its other applications, he said.
"There's a zero sumness to productivity gains, meaning yes … I'm using new technologies ... to cut staff … but my competitors are doing the same," Keum said. "If everybody's sort of improving, then the baseline is just shifting and no one is more profitable."
Blaming AI?
As AI has attracted buzz, so too has the idea that companies could use the technology to eliminate jobs and otherwise cut costs.
By one estimate, at least 112,000 jobs losses can be tied to AI adoption since the start of 2025. In a study released in November, the Massachusetts Institute of Technology also found that AI can already do the job of 11.7% of the U.S. labor market and save companies as much as $1.2 trillion in wages in a variety of sectors.
However, investors have struggled to discern whether firms are truly making decisions informed by AI or simply using the technology as a way to explain away old-fashioned cost cutting or balance-sheet blunders, according to Ally Warson, partner at AI-focused venture capital firm UP.Partners.
The concept is so top of mind for investors and other members of the public that there's even a name for it: "AI washing."
"Companies will leverage whatever is in the media or the accepted narrative to potentially cloak why or why not they may lay people off," Warson told CNBC.
Investors are also grappling with how to measure the influence of AI on companies as several geopolitical and macroeconomic issues also weigh on their stocks, according to Keum.
"Huge geopolitical shocks" such as the Iran war have led to layoffs, while President Donald Trump's tariffs unveiled last year have added to pressures to cut costs, Keum said. And, an unwinding of pandemic-era over-hiring also remains at play.
"Then, there's the true shock of AI," Keum said. "How much we can attribute to each … everyone's guessing."
'Job cuts aren't enough'
Amid those uncertainties, investors are looking beyond layoffs to other ways AI can boost bottom lines, according to Noah Hamman, CEO and founder of investment management firm AdvisorShares.
"The job cuts aren't enough," Hamman said. "People are looking at what … [companies are] spending and then trying to figure out who's going to actually get successful returns out of all those investments."
The investor cited Google, which is owned by publicly traded Alphabet, as an example of a firm that is boosting its business with AI. Its generative AI tool Gemini has contributed to cloud revenue, strengthened search and boosted user engagement across the Google ecosystem, he noted.
The emerging tech is also powering robotics designed for manufacturing, industrial and construction companies, according to Warson, who invests in physical AI startups. Those robots can make dangerous tasks like window washing or wind turbine inspections more efficient and reduce costly workplace injuries, potentially boosting businesses' bottom lines.
One thing is clear, though: Layoff announcements tied to great use of artificial intelligence may not be enough to boost a company's stock price — at least long term.