Rebecca Patterson, the former chief investment strategist at Bridgewater Associates, says corporate CFOs are preparing for layoffs as companies face pressure to adopt artificial intelligence (AI) without increasing budgets.
In an interview with Risk Reversal Media, Patterson describes a discussion she held with US corporate CFOs under Chatham House rules.
She says the responses revealed a striking bias toward job cuts next year.
“But the big risk I’m worried about is jobs. If you don’t have a job, you’re not consuming. If you’re not consuming, earnings expectations get hit.
What triggered this idea for me was a discussion about three weeks ago with a group of U.S. corporate CFOs. It was under Chatham House rules — no names, no companies — but these were big firms everyone knows. I asked them at the beginning of the evening: raise your hand if you’re planning to increase headcount next year. Zero hands went up. Okay, how about keeping it steady? Maybe three hands. Thirty hands for job cuts next year.
I didn’t get into the weeds with them on how many cuts. It might be minimal, but the bias is clear — more job cuts are coming.”
Patterson says the drivers were not only a slowing economy but also pressure from shareholders and boards to accelerate AI adoption.
“But using AI is a cost. You have to buy subscriptions, implement systems, train staff, and monitor cybersecurity. And at the same time, they’re being told: adopt AI, but don’t increase your budget. So you have to find offsets, and the offsets are personnel.
Some of the cuts are AI replacements — if I have 10 investor relations people, maybe now I need two. But much of it is just offsetting the cost, and personnel is the biggest line item for most companies.”
Survey data backs the anecdotal evidence, Patterson says. Challenger, Gray & Christmas reported that through August this year, layoffs totaled about 892,000, 66% higher than the same period a year ago. Meanwhile, a Conference Board survey found that 34% of CEOs plan to shrink their workforce over the next 12 months, the first time since 2020 that reductions outnumber expansions.
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