Third, and the unseen cause, is capital displacement. Companies are spending capital at the expense of labor. This obviously cannot continue indefinitely, but in the meantime, it is weakens companies if those capital investments go sour.
There are signs that spending on AI infrastructure is about to collapse. In Texas, FERMI is the world's largest AI project, yet it can't find an anchor tenant. The CEO and CFO abruptly quit this week.

? Patrick Wood, Editor.

The conventional story about AI and jobs goes like this: A machine learns to do what a human used to do, and the human is let go. That narrative treats displacement as a task-level event. A role is automated, so the role disappears.

But a different mechanism is now visible in corporate earnings calls, SEC filings, and restructuring announcements. Companies are pouring hundreds of billions of dollars into AI infrastructure, and the sheer scale of that investment is creating pressure to find savings elsewhere. Payroll is one of the largest controllable costs, so layoffs function as a way to self-fund the AI buildout without damaging near-term financial results. The worker in this scenario may not have been replaced by an algorithm. But the budget that paid their salary was redirected toward one.

Daniel Keum, a professor at Columbia Business School, described this dynamic in a recent interview with Quartz: Some workers are losing jobs not because their specific roles have been automated but because companies are reallocating resources toward AI and away from everything else.

The distinction matters. It changes how we understand the scale and speed of white-collar displacement.