Researchers just mathematically proved that AI layoffs will collapse the economy

Researchers just mathematically proved that AI layoffs will collapse the economy: and every CEO already knows it.

The “AI Layoff Trap” is no longer just a theory, researchers from UPenn and BU say it’s mathematically inevitable.100K+ tech layoffs in 2025. 80% of US workers exposed. And no market force can stop it. Their conclusion: replacing workers with AI could destabilize the entire economy, trapping CEOs in a classic Prisoner’s Dilemma.

We’ve already seen 100K+ tech layoffs in 2025, with another 52,000 in early 2026. Companies like IBM and Salesforce are moving fast. If you automate, you win (for now). If you don’t, competitors outpace you.

But if everyone automates? Demand crashes, because people without jobs don’t spend. While official unemployment sits at 4.3%, 70% of people (Quinnipiac poll) believe disruption is coming. Even more striking: researchers argue that fixes like UBI or profit taxes won’t solve this demand collapse. UBI (universal basic income) won't fix it. Profit taxes won't fix it. Their proposed solution? A Pigouvian automation tax "robot tax".

So, the real question is: do we regulate AI-driven automation? Or accelerate toward an economic breaking point?

Source: Charly Wargnier@DataChaz