Last spring a client of mine told me she was putting three open roles on hold because, and I'm quoting here, "AI is going to handle most of that work within a year." Eighteen months later she's still doing the same volume with a short-staffed team and burning out the people she kept.
She wasn't lying. She was repeating something she'd heard enough times that it felt like a fact.
The Yahoo Finance piece making the rounds this week makes the case that executives are citing AI to explain layoffs and hiring freezes, but the underlying research points elsewhere: slower growth, tighter capital, post-pandemic overcorrection. The AI explanation is convenient, not accurate. And for small business owners who are actually trying to decide whether to hire right now, the distinction matters more than most people are acknowledging.
Here's what I see on the ground. Companies that froze hiring over the past two years mostly froze because their costs went up, their revenue got uncertain, and investors or lenders told them to get lean. That's a cash story, not a technology story. The AI framing got layered on top of those decisions afterward, partly because it sounds strategic rather than scared, and partly because the AI narrative was everywhere and free to borrow.
Large companies have a particular incentive to use this framing. Blaming AI for a layoff positions leadership as forward-thinking rather than reactive. It reframes a defensive move as a calculated transformation. Shareholders and boards seem to accept it. The people who got laid off know the difference, but they don't control the press release.
For a small business owner this matters for a specific reason: you might be taking your cues from the wrong source.
I've worked with small businesses for a long time, and one of the patterns I keep watching repeat itself is what I'd call borrowed panic. An owner reads about tech company layoffs, hears AI mentioned as the cause, and starts wondering if the role they're about to post is going to be obsolete before the new hire's first anniversary. So they wait. And while they wait, the work piles up on whoever's left, customer service slips, and the owner ends up hiring anyway six months later, only now they're doing it under pressure instead of doing it right.
The AI question is worth asking. I'm not saying ignore it. If you're hiring someone to do work that a current tool already handles well, yes, rethink the role. But that conversation needs to be grounded in your actual workflow, not in a headline about what some Fortune 500 company told analysts.
Most of the roles small businesses hire for don't have clean AI replacements yet. A bookkeeper who also handles client calls. A salesperson who knows the industry well enough to troubleshoot on the fly. An office manager who is essentially the institutional memory of a ten-person company. These roles are complex, relational, and context-dependent in ways that matter. The tools that might eventually touch parts of these jobs are not there yet, and even when they arrive, someone still has to manage the exceptions, handle the relationships, and make judgment calls.
What the research is really pointing at is this: the labor market slowdown we're in has real economic causes, and the companies using AI as the explanation are often obscuring those causes, whether intentionally or not. The actual causes, overcorrection after pandemic-era overhiring, higher interest rates making growth capital expensive, demand softening in certain sectors, are more mundane and less flattering than "we're transforming for the future."
For small businesses making hiring decisions right now, the honest version of the question is not "will AI replace this role?" It's "do we have enough work to justify this role, do we have the cash to support it, and can we onboard someone well enough that they'll stay?" Those are the questions that actually determine whether a hire works out.
I've watched business owners make this harder than it needs to be by importing the anxieties of industries that don't look anything like their own. A sixteen-person manufacturing company in central Ohio is not navigating the same decisions as a tech company shedding middle management. The headlines don't apply the same way.
Hire for the work you actually have. Evaluate tools honestly. And when a large company's PR department tells you AI caused their restructuring, remember they had plenty of other reasons and chose that one.
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