December 21: Jobs, Regulation, and the End of Easy AI Money
Government cuts dwarf AI layoffs, New York ignores the White House, and "AI for X" stops being a pitch that works
The Real Driver Nobody’s Talking About
The actual biggest driver of job losses in 2025? 293,753 planned layoffs from “DOGE Impact”—the Department of Government Efficiency initiatives and federal restructuring. Another 20,976 cuts came from downstream effects as federal funding dried up for private and non-profit entities.
In October alone, the federal government shed 162,000 employees.
AI’s 55,000 job cuts year-to-date.
So why does AI dominate the conversation while government restructuring flies under the radar? Because the AI wage data tells a story that’s genuinely unsettling—just not the one you’d expect.
AI isn’t destroying wages. It’s splitting them.
Occupations with high AI exposure saw real wage growth of 3.8% from mid-2023 to mid-2025. Everyone else? 0.7%. If you’re using AI to do your job better, you’re getting paid more. If you’re not, you’re falling behind.
But here’s where it gets uncomfortable for anyone early in their career: offered salaries for new white-collar job postings have been flat since mid-2024. Entry-level roles are hit hardest. Job postings for white-collar positions dropped 12.7% between Q1 2024 and Q1 2025. Demand for software developers and business analysts fell more than twice as fast as the overall white-collar average.
Why? Because AI lets senior staff handle workloads that used to require junior employees. The career ladder isn’t disappearing—it’s being hollowed out from the bottom.
The broader picture is even stranger.
Total nonfarm payroll added just 64,000 jobs in November. The hiring rate has dropped from 3.4% to 3.2%. Planned hires for 2025 are the lowest since 2011. We’re in what some economists call “growth without hiring”—companies are more productive, but they’re not adding headcount.
Think of it this way: the economy is a ship undergoing a massive engine refit while getting hit by a regulatory tide. The new engine makes the remaining crew more efficient and better paid. But the ship’s overall speed is stalled, and the gangway has been pulled up for most new recruits trying to board.
The AI jobs story isn’t “robots are coming for your job.” It’s more complicated than that.
If you’re already employed and learning to use AI, you’re probably fine—maybe better than fine. If you’re trying to break in, especially at entry level, the doors are closing. And if you’re in government or government-adjacent work, AI isn’t your problem. DOGE is.
The Hiring Doom Loop
Speaking of jobs, here’s a story that should make every GTM leader uncomfortable.
AI is now on both sides of the hiring process. Candidates use AI to write cover letters. Companies use AI to screen applications and conduct interviews. The result? A “doom loop” where everyone’s gaming the system and nobody’s winning.
Research shows that as cover letters get more polished by AI, they become less useful as signals. Hiring managers can’t tell who’s actually good anymore. Meanwhile, candidates describe the process as cold and impersonal.
This is what happens when you bolt AI onto a broken process instead of rethinking the process entirely.
The companies figuring this out are moving away from AI-as-filter toward AI-as-augmentation—using it to surface better questions, not to eliminate human judgment. That’s a fundamentally different approach than “let’s automate the recruiter.”
The Collision Course Nobody Can Ignore
New York just signed the RAISE Act into law. It requires large AI developers—those with over $500 million in revenue—to publish safety protocols and report serious breaches within 72 hours. That’s five times faster than California’s 15-day requirement.
The timing matters. This came days after the White House issued an executive order trying to block states from regulating AI at all.
So now we have a direct standoff: federal government says “hands off,” New York says “watch us.”
Here’s what this means if you’re building or buying AI systems:
The regulatory environment isn’t going to get simpler. It’s going to fragment. Companies selling AI into enterprise are about to face a patchwork of state requirements while the feds and states fight it out in court.
The winners will be companies that built transparency and auditability into their systems from the start—not as compliance theater, but as core architecture. Everyone else will be scrambling to retrofit.
The “AI for X” Era Is Dead
At the Fortune Brainstorm AI conference, some of the biggest VCs in the space said something remarkable: yes, parts of this market are probably a bubble. And they’re fine with it.
Steve Jang from Kindred Ventures and Cathy Gao from Sapphire Ventures argued that bubbles attract talent and fund infrastructure. They’re necessary for the next wave.
But here’s the part that matters for founders and operators: “AI for X” is no longer a differentiator.
Two years ago, you could raise money by saying “we’re building AI for [insert industry].” That pitch is dead. Investors are now looking for companies that solve complex workflows and embed deeply into enterprise operations. Surface-level AI wrappers won’t cut it.
Wall Street is adopting the same posture. Yahoo Finance called it the “selective scalpel” approach—analysts are now picking winners and losers instead of betting on the category. The tide that lifted all boats is receding.
Quick Hits
Al Jazeera goes all-in on AI journalism: Partnered with Google Cloud to launch “The Core”—an operational model that integrates AI into every stage of news production. Not a chatbot. A complete rethinking of how news gets made. This is what AI adoption looks like when you redesign the process instead of just adding tools.
Samsung puts Gemini in your refrigerator: New “AI Vision” kitchen appliances coming at CES 2026. Your fridge will recognize food items, manage inventory, and suggest recipes. Sounds gimmicky until you realize this is Google embedding its AI into the physical world at massive scale.
Aida wants to be your AI dietitian: New startup from a Forbes 30 Under 30 founder. Connects to your lab results, designs meals based on your health data, and automatically orders groceries. The shift from “tracking” to “doing” in health tech is accelerating.
Ex-Googlers bet their company on AI—and won: Dhruv Amin and Marcus Lowe shut down a profitable marketplace business because they saw AI making it obsolete. Rebuilt as an AI coding startup. Now valued at $100 million. Sometimes the right move is burning what works before someone else does.
The Takeaway
Today’s news tells a more complicated story than the headlines suggest.
The jobs crisis isn’t primarily about AI—it’s about government restructuring. But AI is quietly splitting the workforce in two: those who use it are earning more, while entry-level positions evaporate. Meanwhile, states are defying federal orders to regulate AI, VCs are admitting we’re in a bubble, and the overall economy is stuck in “growth without hiring” mode.
The question isn’t whether AI will transform your industry. It’s which side of the split you’ll end up on—and whether you’re building skills and systems that put you on the right one.
What’s the biggest shift you’ve seen in hiring or job requirements in your field this year?
References
[1] New York Governor Signs AI Safety Bill Into Law, Ignoring Trump Executive Order - Benton Institute for Broadband & Society, December 21, 2025
[2] AI job cuts: Amazon, Microsoft and more cite AI for 2025 layoffs - CNBC, December 21, 2025
[3] AI hiring is here. It’s making companies — and job seekers — miserable - CNN Business, December 21, 2025
[4] Al Jazeera Media Network Launches ‘The Core,’ an AI-Integrated News Model Built on Google Cloud - Google Cloud Press Corner, December 21, 2025
[5] Samsung To Unveil AI Vision Built With Google Gemini at CES 2026 - Samsung Global Newsroom, December 21, 2025
[6] Forbes 30 Under 30 Founder Launches “Aida”: The World’s First AI Agent That Acts as Dietitian, Chef, and Personal Shopper - Business Insider, December 21, 2025
[7] Top AI investors say maybe it’s a bubble, but ‘bubbles are good for innovation’ - Fortune, December 21, 2025
[8] Breaking out the ‘selective scalpel’: Wall Street sees AI stock trade as intact - Yahoo Finance, December 21, 2025
[9] Ex-Googlers shuttered successful startup, built AI company worth $100M - CNBC, December 21, 2025
[10] AI Impact on Jobs