The explosive growth of AI in the workplace is reshaping entire industries, creating a mix of fear and excitement among employees and job seekers. Headlines about large-scale automation and layoffs make it easy to feel alarmed; this week, it was reported that global banks might lose as many as 200,000 jobs in the next few years, and Meta is cutting 5% of staff, targeting low-performers. Thankfully, U.S. state governments are starting to take notice and increasing worker protections and reskilling obligations for companies.
In the 2025 “State of the State” address and report, New York Governor Kathy Hochul took a significant step to address the potential workforce impacts of AI by expanding its Worker Adjustment and Retraining Notification (WARN) Act to include AI-related job losses. Under these new regulations, businesses must notify the state of layoffs explicitly tied to AI adoption.
Historically, WARN regulations required companies to provide advance notice of mass layoffs to help workers transition through retraining or finding new employment. Over a dozen U.S. states have a version of this law, with different notice periods and requirements varying by company size.
New York will be the first state to include AI-related layoffs, which establishes a precedent for corporate accountability relative to digital transformation.
The news shows increased awareness of the power of AI on the future organization and its workforce. It also warns employers that AI’s societal and workforce effects must be managed responsibly. This could incentivize employers to consider reskilling or other workforce reallocation programs to avoid reductions in force.
Implications for Employers’ Actions
Including AI in WARN notifications may encourage businesses–at least in New York State–to be more proactive in minimizing disruption when considering layoffs.
Investment in Reskilling Programs
Companies may expand internal training initiatives to help employees transition into new roles that leverage AI technologies rather than compete with them. This includes retraining workers for high-demand roles like AI system management or data analysis with the skills necessary to make the most of the new capabilities.
According to the World Economic Forum, “skill gaps are categorically considered the biggest barrier to business transformation…with 63% of employers identifying them as a major barrier over the 2025-2030 period. Accordingly, 85% of employers surveyed plan to prioritize upskilling their workforce, with…50% planning to transition staff from declining to growing roles.”
Unfortunately, a report from The Conference published in the same week said, “only 7% of CHROs say they are implementing reskilling strategies for job roles that have a high probability for at least 25% of tasks to be taken over by AI.”
For her part, Governor Hochul “will direct the Office of Information Technology Services (ITS) to roll out AI training to ITS-supported State workforce employees. Training will provide basic education about how AI can be safely used in the workplace to improve productivity and efficiency.”
Strategic Workforce Planning
Employers may assess their workforce needs more carefully, identifying opportunities to upskill existing employees rather than relying solely on external hires for AI-related positions. Employers should also consider what new jobs will be created by AI transformation and update recruiting plans accordingly.
On the AI front, the NYCEDC “State of the New York City Economy” report states that for every job displaced by AI in NYC, between four and 10 jobs might be augmented by it. McKinsey & Company also believes the region will add 200,000 net jobs by 2030 related to advancements like (but not exclusively) AI.
Transparency in Decision-Making
With regulatory requirements in place, businesses must openly communicate the rationale for AI-driven changes and include workers in the transition process. Clear communication builds trust and helps alleviate employee concerns by clarifying the reasons behind AI adoption and the expected outcomes. Being transparent creates a team environment where employees feel valued and informed, and increases the liklihood that they embrace employer-sponsored upskilling.
Steps Workers Can Take
Workers should focus on five strategies to position themselves for success through the shifting AI landscape.
- Understand the Trends: Anticipate how AI will augment or displace roles in your industry in the coming years.
- Invest in Lifelong Learning: Online courses make learning convenient for employees of any age and any existing level of technical proficiency.
- Focus on Human Skills: Cultivate “truly human” skills such a leadership, curiosity, and critical thinking that will remain invaluable even with AI.
- Leverage AI Tools: Familiarize yourself with AI-powered tools to show employers you can adapt to and thrive in an AI-enhanced workplace.
- Network and Build Relationships: Connect with communities focused on AI to discover opportunities aligned with your skills and interests.
Heed the WARN-ing About AI and Layoffs
The expansion of WARN regulations to include AI-related job losses underscores the importance of preparation in today’s rapidly changing work environment. New York’s decision to hold companies accountable for the impact of AI on their workforce is a reminder that the future of work is a collaborative effort between people and policies. Let’s see if other states follow suit for AI-related layoffs in 2025.