As artificial intelligence continues to reshape industries, a growing divide is emerging among corporate leaders over how best to integrate AI into their workforces—whether to reduce head counts or maintain staff while boosting productivity.

Cryptocurrency exchange Coinbase recently announced plans to cut 14% of its workforce, with CEO Brian Armstrong citing AI-driven changes in operational efficiency as a key factor. Armstrong explained that engineers have been able to accomplish in days what previously took teams weeks, prompting the company to streamline its staff amid a challenging crypto market. PayPal has also disclosed intentions to reduce its workforce by about 20% over the next two to three years as part of efforts to accelerate AI adoption.

In contrast, some companies are choosing to leverage AI to enhance employee productivity without significant layoffs. Axon Enterprise President Josh Isner reassured the company’s 5,000 employees that AI would not lead to immediate job cuts. He emphasized that AI should augment teams rather than replace them, predicting ongoing hiring even as AI becomes more embedded in the company’s operations. Similarly, Spotify co-CEO Gustav Söderström said the firm would keep its head count mostly unchanged while using AI to increase output and deliver more value to consumers.

The differing approaches reflect broader uncertainty about AI’s implications for workforce size. Meta CFO Susan Li highlighted this ambiguity, noting the company is still determining what its optimal employee count will be as AI adoption grows. Meanwhile, Meta CEO Mark Zuckerberg has announced plans to reduce the workforce by approximately 10%, or 8,000 employees, partly driven by large investments in AI infrastructure and efforts to improve the company’s financial performance amid a declining stock price.

A recent Gartner survey of 350 mid- to senior-level managers found that roughly 80% of companies employing AI technologies such as intelligent automation and autonomous systems had initiated staff reductions. For some firms, layoffs are seen as a swift means to cut costs and adapt to shifting market conditions.

However, industry experts caution against viewing AI solely as a tool for downsizing. Nickle LaMoreaux, chief human resources officer at IBM, urged companies to focus on using AI to drive growth rather than just productivity. She expressed optimism about potential workforce expansions in the coming years, depending on how AI is leveraged.

Even companies choosing to avoid layoffs anticipate significant changes. Synchrony Financial’s HR chief DJ Casto described plans to redeploy employees to new roles or responsibilities, emphasizing agility and adaptability within the workforce. This may involve permanent or temporary reassignments as AI alters traditional job functions.

Among employees affected by recent cuts, opinions on AI’s impact vary. Justin Briley, formerly with Coinbase, acknowledged AI’s ability to create efficiencies but predicted it would ultimately generate more work rather than less. Such perspectives underscore the complex dynamics companies face as they balance technological advances, workforce management, and growth strategies in an AI-driven economy.