The AI Layoffs are Under Way — and Just Before New Rules Arrive

Washington State is considering rules to require companies to disclose when AI affects employment decisions — and the companies lobbying against that authority are laying off thousands ahead of time.

A year ago, Bonnie Kate Wolf, a Seattle-based illustrator and designer, was celebrating a new role.

But last week she posted a much more difficult piece of news.

Kate Wolf went on to describe a workplace full of anguish over AI, and one that was eventually downsized by it:

I was vocal internally about how our users don't want AI slop or features on the platform, how we as employees are feeling uncomfortable and discouraged about AI, and what I wanted from leadership. Last year, I told my manager I was worried about AI-based layoffs. I was told not to worry. At an onsite, we were told that "in the future", we would all be "managers of AIs". That I would be expected to manage some sort of AI employees, rather than craft and design my own work.

The Seattle area has seen a 35% decrease in job postings since 2020, second only to San Francisco. Photo by Thom Milkovic on Unsplash

Across the tech industry, an estimated 700,000 people have lost their jobs in the last four years, according to Layoffs.fyi, and Washington State, home to Microsoft and Amazon (and the estimated $1 billion in state tax breaks since 1994 that helped convinced them to stay and expand there), has seen at least 10,000 layoffs in the last nine months just in Seattle’s King County.

This flurry of layoffs comes as the companies report enormous profits (Microsoft alone reported a record $27.2B profit last summer). But it also arrives as the state legislature is considering tightening the rules on AI.

House Bill 1622 would require government employers to bargain with unions over AI use affecting wages or performance. It passed the House in 2025 but stalled in the Senate. It's coming back in 2026. And a state task force on AI, which delivered an interim report in December, is due to make recommendations related to AI’s effects on education, labor, consumer protection, and healthcare in July. In its December report, the task force wrote that “workers are too often excluded from AI decision-making, even though including workers and unions leads to fairer and more effective adoption,” signaling that its July report could recommend stricter rules on when and how AI can be imposed on workers, or used to justify layoffs.

The layoffs in Washington State by Amazon, Microsoft, Meta, Oracle, Salesforce, Pinterest and others—the first annual job decrease in the Seattle area since 2009—took place before any state laws required those companies to disclose AI’s role in the decision, or imposed any regulations around it.

And lobbying by Amazon, Microsoft, Meta, and others, along with Super PACs launched by tech leaders to fund candidates opposed to state AI regulations, helped steer the federal push to wipe out all state law on the matter. And President Trump’s December executive order threatens to withhold federal funding for major infrastructure investments from any state that the Commerce Secretary deems to have “onerous AI laws.”

Bonnie Kate Wolf was told she'd become a "manager of AIs" in the future. That future lasted less than a year. Now she's looking for work, the company that promised her that AI-managed future has moved on, and Washington State (where the Seattle area’s 5.1% unemployment rate leads the nation’s 4.5% average) is left to pick up the pieces. By the time the state writes rules requiring companies to disclose AI’s role in all this, thousands more workers may have already discovered what it means to be replaced by the algorithm.