A sneaky new type of layoff could impact millions – most workers might even realize it

Andrew Crapuchettes advises American workers to stay AI-enabled to face a tighter job market situation.

PUBLISHED MAR 7, 2026

Representative Cover Image Source: Getty Images | John Moore

Over the last few years, artificial intelligence has been increasingly linked to thousands of job cuts as companies, especially in the tech sector, are trying to automate certain tasks that were once handled manually. Experts have revealed that this concerning trend is also spreading across various other industries as they aim to reduce costs and improve overall efficiency. Meanwhile, in recent news, RedBalloon CEO Andrew Crapuchettes claimed that the rapid rise of AI in the workplace is now leaving millions of workers vulnerable to a new kind of 'invisible layoffs'.

Representative Image | Getty Images | Photo by David McNew — People looking for jobs. (Representative Image Source: Getty Images | David McNew)

Crapuchettes cautioned that the hidden form of layoff is occurring as AI algorithms are screening out several qualified American job applicants, allegedly contributing to the rise in the unemployment rate, which was recently recorded at 4.4%. As reported by Fox Business, he said, "What's happening is job seekers are using AI, and they're applying to maybe 100 jobs a day with their resume and their cover letter looking just perfect, and vomiting their resume out into the market. And guess what? AI likes AI-written resumes better. And the problem is that AI-written resumes make it to the top of the stack, and then they bring those people in for interviews, and it turns out... That a perfect resume and a perfect employee are not the same thing."

Employees talking about Artificial Intelligence. (Representative Image Source: Getty Images | Anchiy)

Crapuchettes added, "AI is good at doing boring work, but actually having wisdom about a specific person is something that has to be a distinctly human activity." According to him, most of today’s HR technology uses AI at every step of the hiring procedure, which creates major difficulties for candidates to secure employment, even if they are qualified for the role. He even acknowledged that at RedBalloon, AI has helped his team accomplish three times as much work without hiring any additional staff.

American job seekers at a job fair (Cover image source: Getty Images | Joe Raedle) — American job seekers at a job fair. (Representative Image Source: Getty Images | Joe Raedle)

Therefore, Crapuchettes advises American workers to stay AI-enabled to face a tighter job market situation. He believes that even those who are looking for roles like construction workers and truck drivers should now be able to use AI tools effectively to maintain job security. He stated, "Employers are looking for people who aren't afraid to figure out how to use AI to be more effective and efficient in their job." Meanwhile, the CEO even spoke about the recently released February jobs report by the Labor Department, which highlighted a loss of 92,000 jobs.

Representative cover image of Stephen Greene looking to land a job | Getty Images | Photo by Joe Raedle — An unemployed man looking for work. (Representative Image Source: Getty Images | Joe Raedle)

He said, "Overall, it's still a very disappointing number. We'd love to see the jobs report growing all the time. But there are a lot of different factors that are driving this. It's not just the headline that we're seeing." The BLS data also revealed that employment in the government sector has decreased by 330,000 jobs, or 11%, since its peak in October 2024. Crapuchettes describes this reduction as a 'handcuff' being lifted from the private sector, suggesting that private companies have long struggled to compete with the generous benefits that are offered by the government sector.