Executives advocate for reshaping of workforce following job cuts from AI

As manufacturing is laying off workers in favor of AI and more experienced talent, some argue a workforce transformation is underway.

Sarah Mattalian

Nov. 13, 2025

4 min read

What you'll learn:

AI drove manufacturing job losses to a 20-year high in October, though cost-cutting was the primary reason and AI adoption was the second-leading cause.
Executives argue AI is reshaping rather than eliminating jobs, with workers transitioning to become "AI supervisors" who focus on problem-solving and innovation while AI handles routine tasks like data entry and inspections.
Industry leaders recommend upskilling existing workers instead of layoffs.

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Although the adoption of artificial intelligence played the second-leading role in October in pushing monthly industrial job losses to a 20-year high, some experts argued AI is instead reshaping the workforce, and they encouraged employers to invest in existing talent rather than lay off their employees.

AI adoption in U.S. manufacturing is growing rapidly, with over 80% of manufacturing executives now viewing it as a core growth driver, according to a September report from Digital Commerce 360.

However, job cuts last month reached 153,074 across industries, mainly due to cost-cutting. But the No. 2 cause was AI adoption, according to the report from outplacement firm Challenger, Gray & Christmas.

But some executives said that while AI is resulting in layoffs, infusion of the technology into manufacturing operations also is part of a larger reshaping of the workforce.

It’s not the time for companies to lay off their workers, it’s time to bridge the skills gap internally.
- Nicolas Genest, CEO, CodeBoxx

“AI isn’t replacing people on the shop floor; it’s changing what their jobs look like. Routine tasks like data entry, inspection, or basic programming are being automated, freeing skilled workers to focus on problem-solving, process improvement, and innovation,” Ivan Madera, founder and CEO of Adaptiv AI, said in an emailed statement to Smart Industry.

Madera wrote that AI also is used to predict operational risk on the production floor, identifying bottlenecks and overburdened work centers. That shift, he said, turns employees into “AI supervisors” who help guide the technology, not compete with it.

“The productivity boost from AI truly occurs when people know how to use it properly. Workers need training, not just on how AI tools work, but also on how to interpret AI recommendations and make smart decisions,” he said.

Madera emphasized that upskilling helps connect traditional manufacturing skills with digital tools, preserving expert knowledge while delegating repetitive tasks to AI.

“The growth of the American industrial base depends on our adoption of AI to help us do more with the resources we already have,” he wrote.

Some estimates indicate that over 52% of manufacturers had adopted AI to some level by mid-2025, and 88% of organizations regularly use the technology in at least one business function, according to a McKinsey survey from this month.

The growth of the American industrial base depends on our adoption of AI to help us do more with the resources we already have.
- Ivan Madera, founder and CEO, Adaptiv AI

The swift adoption is largely a result of the labor shortage that manufacturing companies have faced for years. Approximately 2 million jobs could be unfulfilled by the end of the decade, according to data from Deloitte and The Manufacturing Institute.

Anxiety about AI in job retention

Meanwhile, a shift in public awareness of AI and job losses occurred this year, as a study from Cybernews and nexos.ai revealed that Americans are becoming increasingly anxious about AI in 2025.

The study found that until late October, despite the wave of layoffs throughout 2025, anxiety related to job displacement was low. This changed the week of Oct. 19, when interest in AI job displacement and workforce impact spiked 233%.

But the jury is still out regarding whether AI will be a growth engine for manufacturing executives’ operations or for their workforce.

Nicolas Genest, CEO of software training company CodeBoxx, encouraged employers to train in-house employees on how to use AI rather than lay them off in favor of new talent that might be more experienced.

Genest said that although using AI to save on labor costs might be cheaper in the short term, it will result in key long-term losses of company culture, guiding principles and loyalty. The same result applies to hiring new employees, even if they have the latest skills.

“It’s not the time for companies to lay off their workers, it’s time to bridge the skills gap internally,” Genest said.

Instead, Genest encouraged companies to upscale existing talent with AI partners, such as his company, and to invest in training programs, encouraging companies to not “fall for the efficiency narrative of Wall Street” by cutting jobs through replacing them with AI.

About the Author

Sarah Mattalian

Staff Writer

Sarah Mattalian is a Chicago-based journalist writing for Smart Industry and Automation World, two brands of Endeavor Business Media, covering industry trends and manufacturing technology. In 2025, she graduated with a master's degree in journalism from Northwestern University's Medill School of Journalism, specializing in health, environment and science reporting. She does freelance work as well, covering public health and the environment in Chicagoland and in the Midwest. Her work has appeared in Inside Climate News, Inside Washington Publishers, NBC4 in Washington, D.C., The Durango Herald and North Jersey Daily News. She has a translation certificate in Spanish.