When an employer decides that AI or automation means it needs fewer people, the reason for the cut does not change the process. Job losses on a large enough scale trigger the same consultation and notice rules as any other restructuring. This page sets out when those rules apply in the EU and the US, what employers must provide, and what workers can expect.
The short answer: in the EU, an employer contemplating collective redundancies must consult workers' representatives in good time, in writing, about ways to avoid or reduce them, and must notify the public authority; the redundancies cannot take effect earlier than 30 days after that notification. In the US, the federal WARN Act requires 60 calendar days' notice of a plant closing or mass layoff at covered employers, and some states, such as New York, require 90 days.
Why AI cuts fall under these rules
The EU Collective Redundancies Directive covers dismissals for one or more reasons not related to the individual workers concerned (Directive 98/59/EC, Article 1). Replacing tasks with an AI system is a reason of that kind. The US WARN rules count employment losses at a site regardless of why the employer made the cut (20 CFR Part 639). What matters is the number of people affected in a set period, not the technology behind the decision. If the work moves to an outside AI vendor, transfer of undertakings rules may apply first; see outsourcing work to AI vendors. For a wider view of how AI is changing jobs, see AI at work and workers' rights.
EU: the Collective Redundancies Directive
When it applies
Article 1 lets each Member State choose one of two thresholds:
- over 30 days: at least 10 redundancies in establishments normally employing more than 20 and less than 100 workers, at least 10% in establishments of 100 to 299, and at least 30 in establishments of 300 or more; or
- over 90 days: at least 20 redundancies, whatever the size of the establishment.
Other terminations on the employer's initiative for reasons not related to the individual worker count toward the total, provided there are at least five redundancies. Workers on fixed-term or task-based contracts are not covered unless they are dismissed before the contract ends, and workers in public administrative bodies are excluded.
What the employer must do
- Consult in good time with workers' representatives, with a view to reaching an agreement (Article 2(1)).
- Cover at least ways and means of avoiding the redundancies or reducing the number affected, and mitigating the consequences through accompanying social measures, including aid for redeploying or retraining the workers made redundant (Article 2(2)). For roles reshaped by AI, retraining for the new tasks is a natural part of that discussion.
- Give information in writing: the reasons, the number and categories of workers to be made redundant, the number and categories normally employed, the period, the proposed selection criteria where the employer sets them, and how any redundancy payments beyond the legal minimum are calculated (Article 2(3)).
- Notify the competent public authority in writing and send the workers' representatives a copy (Article 3).
- Wait: notified redundancies take effect no earlier than 30 days after notification, a period the authority uses to seek solutions; Member States may let it extend this to 60 days or more (Article 4).
These duties apply even where the decision is taken by a company that controls the employer, and the employer cannot defend a breach by saying the parent company did not give it the information (Article 2(4)). Member States can set more favourable rules, so national law decides the details.
If an AI system is used to help choose who is selected, the AI Act may also apply: AI used to make decisions affecting termination of work-related relationships is listed as high-risk in Annex III, point 4, with the deployer duties for such systems applying from 2 December 2027. For how the same rules treat AI ratings of staff, see AI in performance reviews.
United States: the WARN Act
The Department of Labor's WARN regulations require covered employers to give notice 60 calendar days in advance of plant closings and mass layoffs (20 CFR 639.1).
- Covered employers: businesses with 100 or more employees excluding part-time employees, or 100 or more employees including part-time employees who together work at least 4,000 hours a week excluding overtime (639.3(a)).
- Plant closing: a shutdown of a single site, or of one or more facilities or operating units within it, causing an employment loss for 50 or more employees, excluding part-time employees, in any 30-day period (639.3(b)).
- Mass layoff: a reduction in force causing an employment loss at a single site in any 30-day period for at least 33% of active employees and at least 50 employees, or for 500 or more employees regardless of the percentage, in each case excluding part-time employees (639.3(c)).
- Employment loss: a termination other than a discharge for cause, voluntary departure or retirement; a layoff exceeding six months; or a cut in hours of more than 50% in each month of any six-month period (639.3(f)).
- Who gets notice: each representative of the affected employees or, if there is none, each affected employee, plus the State dislocated worker unit and the chief elected official of the local government (639.6).
Employers must look 30 days ahead and behind, and in some cases 90 days, to see whether separate cuts add up to a covered event (639.5), so a rollout that removes roles in waves can still trigger notice.
State WARN laws
Some states go further. New York's WARN Act applies to private businesses with 50 or more full-time employees in the state, covers closings affecting 25 or more employees and some smaller mass layoffs, and requires notice 90 days in advance; employers that do not give notice may have to pay back wages and benefits and a civil penalty (New York State Department of Labor, WARN). Check the state where the work is based.
Practical steps
- Employers: before committing to an AI rollout that removes roles, count the likely job losses per site over 30 and 90 days, start consultation or notice early, and look seriously at redeployment and retraining. If you use an AI tool to help select people, keep human review and records of the criteria.
- Great Britain: the UK rules are in the Trade Union and Labour Relations (Consolidation) Act 1992; see AI and redundancy selection in Great Britain and notifying the Secretary of State, and where work moves to an outside provider, TUPE and AI outsourcing.
- Workers: ask whether a collective process has started, who your representatives are, and what selection criteria apply. In Great Britain, elected representatives are entitled to paid time off for the role. A union can help; see AI and unions.
This page is general information, not legal advice.
Questions and answers
Do layoff rules apply if jobs are cut because of AI?
Yes. The EU Collective Redundancies Directive covers dismissals for reasons not related to the individual workers, and US WARN counts employment losses by number and period. The cause being AI or automation does not take a cut outside these rules.
How much notice is required in the US?
The federal WARN Act requires 60 calendar days for a covered plant closing or mass layoff. Some states require more; New York requires 90 days.
What must EU employers discuss with workers' representatives?
At least ways to avoid collective redundancies or reduce the number affected, and how to mitigate the consequences, including help with redeployment or retraining (Article 2(2) of Directive 98/59/EC).
Can an AI tool choose who is laid off?
In the EU, AI used for decisions affecting termination of work-related relationships is high-risk under the AI Act, with duties such as human oversight applying from 2 December 2027. The proposed selection criteria are also part of the written information in the collective redundancy consultation.