The Productivity Promise Is Not Paying Out
U.S. companies have poured billions of dollars into artificial intelligence, but the returns are not showing up where it counts. An Atlanta Federal Reserve study found that roughly 90% of executives believe AI has not yet boosted productivity at their companies. Broader productivity gains recorded since 2021 are more likely attributable to remote work or sector-level downsizing — particularly in technology — than to AI itself.
That finding comes from research conducted by Mark Ma and colleagues, published in Fortune on August 22, 2026. The team analyzed millions of job-satisfaction reviews, thousands of corporate financial reports, and hundreds of AI investment and layoff announcements from U.S. public companies over the past five years.
A Self-Defeating Corporate Strategy
The research reveals a clear pattern: as AI investment announcements increase, so do layoff announcements attributed to AI. The authors argue this is not coincidence. Managers at publicly traded firms face pressure to show a financial return on heavy AI spending. The fastest lever available is cutting headcount and lowering labor costs — sometimes even before the AI investment arrives, to free up capital.
The market, however, is not impressed. When the researchers examined stock reactions to AI-related layoff announcements, the average return was close to zero. For more than half of these events, the market reaction was negative or flat. A handful of companies, such as the financial-tech platform Block, did see share-price jumps on similar news, but they are the exception.
The Hidden Cost: Workers Who Resist the Tool
The deeper damage is behavioral. The study analyzed millions of employee reviews on Glassdoor and found that AI-related comments are significantly more negative than the overall tone of reviews on the platform. Workers cite lack of training, few opportunities to upgrade skills, poor corporate AI leadership, and doubts about whether AI actually improves their work. The single most critical topic, by a wide margin: job-security fears.
When companies announce AI-driven layoffs, employee sentiment toward AI drops sharply. Because the research also identifies a strong association between positive AI sentiment and firm productivity, the conclusion is direct — anti-AI sentiment among workers lowers output and offsets whatever efficiency gains the technology might otherwise deliver. Laying off employees in the name of AI is, in the authors' words, 'a self-defeating strategy.'
CEO Times Take
The numbers here carry a lesson that free-enterprise managers ignore at their peril. Capital allocation is not the same as value creation. Buying a tool and then eliminating the skilled workforce needed to operate it is not a productivity strategy — it is an accounting maneuver dressed up as innovation. The market has already voted: near-zero returns on AI layoff announcements signal that investors see the hidden costs even when the C-suite does not.
The path to genuine AI-driven productivity runs through training, clear incentives, and a workforce that trusts management enough to adopt new tools. Companies that treat their employees as a line item to be cut — rather than as the human capital that makes any technology investment pay off — will find themselves with expensive software and no one willing to use it. The free market rewards results, not press releases.
