In recent months, layoff news has spread continuously worldwide, with companies like Meta, Microsoft, Amazon, Salesforce, and Block all announcing large staff reductions while investing heavily in AI and Data Centers.
This raises the question of whether these changes are merely business restructuring or if the world is entering an era where AI increasingly replaces human labor.
For Thailand, AI may not yet be the main cause of layoffs, as most pressure still stems from a slowing economy, rising costs, factory closures, and geopolitical issues such as war.
However, it is becoming clearer that many organizations are choosing to "stop hiring" new staff to replace those who resign, gradually introducing AI to handle some tasks instead of human workers.
This might seem like a small internal change, but if many companies act simultaneously, the impact could be larger than expected, because when companies cut costs by reducing staff, the lost jobs also mean lost purchasing power circulating in the economy.
SCB EIC refers to the 2026 study The AI Layoff Trap by Falk and Tsoukalas, which explains that labor plays two roles simultaneously: as "producers" and as "consumers."
When companies reduce staff, they benefit from lower costs, but the lost purchasing power becomes a burden on other businesses in the system, a dynamic clearer when viewed through game theory.
From a broad perspective, companies using AI to cut costs is a logical choice as it boosts efficiency, competitiveness, and profits immediately. Yet if all companies make the same choice, the best outcome for each may become the worst for the overall economy, since simultaneous income reductions slow consumption.
“Sales decline, businesses cut costs, delay investments, stop hiring or lay off again—this cycle repeats, exerting pressure across the entire economy.”
Notably, those hit first may not be office or tech workers as expected, but rather small eateries outside office buildings, coffee shops with regular morning customers, clothing stores, barbershops, mobile shops, markets, convenience stores, or small SMEs that have never invested in AI.
These businesses are not losing customers to AI but are affected by "lost purchasing power." When people tighten their budgets, the first expenses cut are usually small items like a cup of coffee, a piece of clothing, or dining out, gradually spreading impact from headquarters to small community shops.
SCB EIC calls this the “layoff trap,” where everyone’s reasons lead to everyone’s impact. While Thailand has yet to see large AI-driven layoffs like other countries, warning signs are emerging.
Especially notable is the slowdown in hiring entry-level workers, making it harder for new graduates to enter the job market, while many workers lack skills suited for AI-era jobs. Combined with high household debt and an economy relying heavily on SMEs and services, weakening purchasing power could quickly spread through the economic base.
The solution is not opposing AI—no country can stop technological progress—but rather using AI to "augment human capabilities" instead of "replace humans," along with serious investment in reskilling and upskilling, plus policies ensuring productivity gains do not come at the cost of national purchasing power.
Ultimately, the economy is not driven by AI alone but by "people" who remain employed, earn income, and spend confidently. This may be the most critical question in the AI era: if all companies cut staff to improve efficiency, who will be left to spend?
Source: SCB EIC
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