Looking at AI Layoffs from a Different Angle: Pig Butchering May Benefit

May 27, 2026

Another dinobaby post. No AI unless it is an image. This dinobaby is not Grandma Moses, just Grandpa Arnold.

I am not sure “AI layoffs” are the only cause of some financial headwinds in AI Land. However, I did find some of the information in “AI Layoffs Were Supposed to Boost Stocks. They’re Doing the Opposite.” interesting.

The unintended consequences of “good enough” smart software. For serious commercial, medical, and technical applications, AI might just good enough. But to bad actors it is an accelerant. The layoffs do nothing more than provide a pool of angry, capable professionals. Some might be tempted to give online crime a try. Remote work, good pay, no mouse tracking — what’s not to like. Thanks, MidJourney. Good enough to put put some illustrators into another line of work.

The premise of the article is that firing people is the reason that certain companies share prices are headed south. I noted this statement: “New data from CNBC tracking 23 S&P 500 companies that announced AI-linked layoffs found the move is backfiring more often than not.”

The somewhat disjointed write up adds:

A separate Gartner survey of 350 large-company executives found companies cutting for AI reasons weren’t generating better returns than those that didn’t. As it turns out, the highest-ROI companies were found to be using AI for “people amplification” (making workers more productive), not replacing them outright.

The article continues:

The “AI layoff” has become a corporate ritual at this point: cut staff, say AI made you do it, hope investors cheer. But the data says it isn’t working on either end. Markets aren’t rewarding it, and 49,135 workers have lost jobs to AI attribution so far in 2026 alone, nearly as many as all of last year. Even Sam Altman called it out. In February, he said there’s “some AI washing where people are blaming AI for layoffs that they would otherwise” do anyway. So basically, the companies claiming benefits from AI layoffs are pretty much just in trouble and looking to spin it as a positive (“look at how productive we are now!”).

For me, the most interesting RIF story is the one about Meta’s approach to freeing up cash for the firm’s limping Llama LLM technology. Yahoo Finance told me in one of its mash up news stories “Meta Layoffs 2026: 8,000 Jobs Cut in AI Restructuring:

Meta began notifying roughly 8,000 employees Wednesday that they are being laid off, the first wave of a major restructuring the company has framed as necessary to fund its push into artificial intelligence. Singapore-based workers were the first to learn their fate, with layoff emails arriving at 4 a.m. local time, according to Bloomberg. Employees in the U.K. and the U.S. were slated to be informed as their own mornings began. Meta asked North American employees to work from home Wednesday.

My view of the stock connection and Meta’s gutting of people, not just jobs is a consequence of America’s technology oligopolists in general and the BAIT (big AI tech) companies. The supporting players are in this too, but I am just setting them aside in this short blog post.

What’s going on is that AI gained traction slowly and then caught the attention of Microsoft. That company tried to pivot to make AI its go-to tech play. What it did was trigger a PR and marketing war. Companies piled in, flipping the same crazy alarm that Google did. The fear of being left behind as future earnings were sucked down the pockets of the first AI players has created a very crazy environment.

People are being terminated, but it is not clear why. AI projects are everywhere, but obvious winners are tough to find and verify. Professionals are routinely embarrassed by hallucinating outputs copied and pasted without close inspection by lawyers, students, medical professionals, consultants, and more. The past, current, and future cost of inefficient AI compute, algorithms, training, legal fees, and infrastructure are making it easy for glib critics to zap the AI soothsayers. Even small towns are jolted from doom scrolling on the mobiles to protest big data centers that will have some impact on the people living near them.

Now companies are scrambling. A few BAIT outfits are doing the Meta Zuck chest cracking; for example, Microsoft. Others are trying every conceivable trick to generate revenue and “win” the title of top oligopolist in AI Land. Others are just promising breakthroughs like self directed training in the real world. Yep, any day now.

The disruptions are now visible. The explanations are remarkable demonstrations of creative excuse making. What’s significant is that different types of disruptions are popping up. Smart medical outputs are incorrect and can kill patients. Smart agents are useful, not to some businesses. But to bad actors the sketchy agent technology is a like giving a capable bad actor super powers.

I would argue that the layoffs are going to free up some talent to give cyber crime a whirl. For those already engaged in illegal activities, the “good enough” large language model approach to finding vulnerabilities and automating pig butchering is a true gift. Who else sees AI as a perfectly satisfactory turbo charger for online fraud with capable remote workers looking for a gig?

That’s the knock on from AI craziness that does not get attention.

Stephen E Arnold, May 27, 2026

Written by Stephen E. Arnold · Filed Under AI, cybercrime, News

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Stephen E. Arnold monitors search, content processing, text mining and related topics from his high-tech nerve center in rural Kentucky. He tries to winnow the goose feathers from the giblets. He works with colleagues worldwide to make this Web log useful to those who want to go "beyond search". Contact him at sa [at] arnoldit.com. His Web site with additional information about search is arnoldit.com.