05-27-2026
Employer Insight: A new California executive order directs state agencies to find ways to limit anticipated job losses from AI. Some of the suggested methods from the order include severance policies, subsidized employment, and other means to support displaced workers.
The order indicates that state agencies should work with academic institutions, labor groups, and AI industry leaders to study options for companies to keep their employees rather than replace them with tech. The order also suggests expanded job-training programs, especially for white-collar workers, who are most likely to be impacted. These workers hold positions in customer service, software development, and marketing and sales. Reviewing universal basic capital that would give California residents stakes in corporate assets is also part of the order.
Governor Gavin Newsom stated that traditional support for displaced workers, like unemployment insurance, will not be enough in the face of AI. He noted warnings by AI leaders that changes may be swift, with entire job categories eliminated. The governor stated California must “think bigger,” and the moment requires us to “reimagine the entire system — how we work, how we govern, how we prepare people for the future.”
Meta’s 8,000-person layoff the day before California’s executive order highlights the issue’s immediacy. These layoffs resulted from the company’s shift to AI development. In a memo to employees, CEO Mark Zuckerberg expressed optimism about the company’s AI efforts and said that he did not anticipate more layoffs in 2026. Laid-off workers received 16 weeks of severance pay, plus an additional two weeks for every year of service at Meta. Additionally, 7,000 remaining workers were reassigned to new AI initiatives this week.