March 2026 – Artificial intelligence is increasingly invoked as the explanation behind organisational changes, productivity shifts, or even workforce reductions. In many cases this reflects a genuine technological transformation. In others, however, AI risks becoming a convenient narrative rather than an accurate description of what actually occurs within a business.
The numbers are instructive. According to a report published by Challenger, Gray & Christmas, of the 1.2 million job cuts announced by US companies in 2025, AI was cited in approximately 55,000 of them. When workforce decisions are already subject to scrutiny, explanations that do not hold up to legal or factual examination may create additional risks for employers.
What is AI washing and why should your organisation care?
The term “AI-washing” has recently emerged to describe situations where companies overstate or misrepresent their actual use of artificial intelligence. This may involve presenting technologies as “AI-driven” when their capabilities are more limited or attributing outcomes to AI that the technology has not genuinely produced.
In practice, AI-washing can take different forms. At one end of the spectrum, it may appear in marketing language that exaggerates the use of AI. At the other, it can surface in organisational narratives that attribute business decisions to “AI-driven efficiency” even where the technology plays only a marginal role.
The topic is also attracting increasing attention from regulators. In several jurisdictions, authorities have already acted against companies that made misleading claims about the capabilities of their AI technologies. For example, in the United Kingdom, advertising regulators have warned companies against exaggerating AI functionalities in commercial communications, while competition and consumer protection authorities have strengthened enforcement tools against deceptive practices[1]. In the United States, AI-related disclosures have also begun to appear in securities litigation and enforcement actions[2].
Against this background, the way organisations describe the role of AI is becoming increasingly relevant not only from a reputational perspective, but also from a legal and regulatory one.
For employers, this trend raises a practical question: does it matter from an employment law perspective how AI is described internally or externally? In short, yes.
The Romanian perspective: Why "we're transforming with AI" is not a standalone legal justification
Romanian employment law requires that any dismissal for reasons unrelated to the employee be grounded in a real, documented, objective and verifiable business rationale.
Courts will look beyond the terminology used by the employer and examine the factual circumstances surrounding the organisational change. In particular, they will assess whether the position that was eliminated truly ceased to exist in substance and whether the business reason invoked reflects what was actually occurring within the organisation at the time of the decision. In such situations, courts may annul the dismissal decision and order reinstatement of the employee (upon request) and payment of damages corresponding to the salaries as of the dismissal until the final ruling of the court.
If a restructuring is grounded primarily based on “AI-driven efficiency gains” but the employer cannot point to deployed systems, changed workflows, or documented organisational impact, the narrative may be difficult to sustain in court. The same applies if the underlying work continues in another form or under a similar position, as this may suggest that the dismissal is based on grounds that may not withstand a challenge in court.
Therefore, the issue is not the use of AI itself. The issue is whether the description of AI’s role accurately reflects operational reality.
What good practice looks like
The goal is not to avoid mentioning AI. Rather, it is to ensure that when AI is invoked as part of business rationale, the statement can be substantiated and supported by internal documents and the actual situation within the company.
Before AI is considered as restructuring rationale, your organisation should be able to answer a clear set of questions, such as:
- Are the systems in question actually deployed and operational?
- Which specific tasks or functions are being automated and on what timeline?
- Is this reflected in the organisational structure, not only in strategic plans or future initiatives?
- Are internal communications, public statements, and formal documentation consistent with each other?
When these elements are aligned, references to AI can form part of a restructuring process.
Key takeaways
AI is transforming how organisations operate and how work is performed. However, statements such as “AI is transforming the workplace” are not the same as demonstrating that “AI has transformed this role within this organisation to the extent that it no longer needs to exist.”
For employers, the key is ensuring that workforce decisions remain grounded in documented operational reality rather than technological narratives. When the role of AI is clearly defined, properly implemented and consistently documented, it can form part of a legitimate business rationale.