AI could trigger a layoff trap that even smart CEOs can't escape

Two economists, Gerry Tsoukalas and Brett Falk, warn that companies could be self-destructing by replacing workers with AI and eroding consumer demand. ADEK BERRY / AFP via Getty Images Companies could be self-destructing by replacing workers with AI, two economists warned. The World Economic Forum said that AI's disruption is outpacing traditional reskilling efforts. Economists suggest taxing AI workforce replacement and subsidizing employee retention. Economists are warning that AI could push companies into a wave of layoffs that ends in self-destruction. Gerry Tsoukalas and Brett Falk, authors of "The AI Layoff Trap," a research paper published by The Wharton School, said CEOs can become trapped in a race to automate that erodes consumer spending on which their businesses depend. "The main question we wanted to understand is who's going to be left to buy products if everyone gets automated and replaced by a robot?"