AI Is Now the Top Reason for Layoffs. For Some Workers, It’s Also a Path to Starting a Business.

In the pursuit of greater productivity and profit, companies see AI as a glow on the horizon. For many workers, however, the AI revolution has already arrived in the form of a pink slip.

In January, Amazon announced nearly 16,000 job cuts to reduce organizational layers and bureaucracy. CEO Andy Jassy had previously predicted that generative AI and agents would mean fewer people doing some existing jobs. Meta soon followed with plans to eliminate about 8,000 positions, close to 10% of its workforce, in pursuit of greater efficiency while directing more resources toward AI. Financial technology company Block announced more than 4,000 cuts, nearly half of its workforce, as CEO Jack Dorsey explained that intelligence tools, combined with smaller and flatter teams, are changing how companies operate.

These tech heavyweights are hardly alone. Reuters has tracked AI-linked cuts or restructuring at companies ranging from Allianz and Nike to Telstra and British American Tobacco. In its monthly Challenger Report, outplacement firm Challenger, Gray & Christmas attributed 7% of U.S. layoffs announced in January to AI. By the end of September, AI had been cited in more than 120,000 announced job cuts in 2026, about 21% of the total, making it the leading reason for layoffs so far this year.

Some of those workers will find another job or retire early. But if the data points to a trend, others may be turning lemons into lemonade through entrepreneurship.

Struck out? Strike out on your own

New business formation has been unusually strong this year, with nearly every month setting a record compared with the same month in previous years. According to the U.S. Census Bureau, business formation statistics, nearly 4.2 million business applications were filed nationwide in the first eight months of 2026, up about 17% from the same period in 2025.

On their own, these numbers don’t prove that AI, layoffs or both are driving the surge. Business creation rises and falls for many reasons, as it did during the pandemic, and not every new registration becomes an operating company.

Still, the convergence turns heads. Even as large employers aim to accomplish more with smaller teams, backed by the muscle of AI, workers have access to many of the same productivity tools. In their hands, those tools offer a supercharged way to combine specialized knowledge, an idea for a product or service that solves a problem or fills a niche and a passion for bringing it to market.

Prepare for the AI-driven workplace

Not everyone affected by layoffs is being replaced by an AI agent. Companies cut jobs for many reasons, including industry pressures and narrowing margins. But AI is putting its thumb on the scale. Amazon, Meta and Block have all announced major reductions as they embrace AI, though each has described its role differently: Amazon emphasized cutting layers and bureaucracy, Meta pointed to shifting resources toward AI, and Block said AI-enabled productivity calls for a smaller workforce.

Rather than curse AI for eroding jobs, aspiring entrepreneurs should embrace what it can do for them. The same technology that helps a large corporation accomplish more with fewer employees can help a one-person venture tackle tasks that once required an entire team. AI can help research markets, develop business plans, create marketing materials, handle basic customer inquiries and automate routine administrative work.

When you’re getting a new business off the ground, every task you can handle without adding fixed payroll lowers the revenue your business needs to survive its lean years. Just as the internet and smartphones transformed business a generation ago, AI can transform yours.

Put your experience to work

A layoff can make years, or even decades, spent building a career at one company feel suddenly devalued. For a would-be entrepreneur, however, that hard-won experience may be the most valuable asset.

Let’s be honest: Employees know their industry’s problems because they’ve lived with them. They know what customers complain about, which processes waste time, which services cost too much and where existing products fall short. Unless you’re set on doing something completely different, like leaving a civil engineering job to open a scrapbooking shop, you have an opportunity to analyze those issues and, free of corporate baggage, create real solutions.

You don’t have to reinvent the wheel. A specialized consulting practice, service business or niche product that addresses a problem you already understand may offer a natural, inexpensive path to entrepreneurship.

Use AI to lower the cost of launching

One of AI’s biggest benefits for new entrepreneurs is the ability to test an idea before making a major financial commitment. You may not need to lease an office, hire employees or buy expensive technology right away.

Start with a small, workable version of your idea. Interview potential customers. Build a basic website. Test different pricing structures and marketing offers. Use AI for research and routine work, but bring in human experts when needed. Spending doesn’t make you a successful entrepreneur — revenue does. And revenue validates a business idea better than a glitzy launch party or a wood-paneled office.

If you’re leaving salaried employment, protecting your personal cash matters too, even if you received a generous severance package. Add up your household expenses alongside your business costs, and know your full runway before taking on serious financial risk.

Keep it human

AI may be eliminating jobs — it may have eliminated yours. Entrepreneurs can use these tools to keep startup costs low, including labor costs. But don’t take that as a sign to cut people out of the picture.

The surge in new businesses may partly reflect corporate America devaluing human work and putting profits ahead of people. As layoffs continue to reshape the workforce, traditional employment may keep shrinking while the ranks of people who recognize the value of their own expertise grow.

Building a business means building a trustworthy brand, and that requires human interaction. AI can create content, analyze data and automate repetitive tasks, saving time and money. Where it falls short is in building person-to-person relationships. For entrepreneurs, AI’s role is to free you up to apply your expertise, judgment and creativity. After all, those uniquely human traits are what will help you connect with customers and establish your brand.