California Governor Gavin Newsom signed a new executive order directing state agencies to prepare for the economic and labor impact of artificial intelligence as concerns over automation-driven job losses intensify across the technology sector.
The order instructs agencies to explore policies aimed at supporting workers displaced by AI, including severance protections, subsidized employment programs, workforce retraining, and expanded labor transition support.
State agencies will also produce a report analyzing the impact of AI on California’s labor market and evaluate additional measures including stock compensation models, worker cooperatives, and how labor unions are negotiating around AI deployment.
The move comes amid growing political pressure on Newsom as layoffs tied to AI adoption continue to spread across the technology industry.
AI Layoffs Intensify Across Tech Sector
The executive order was signed one day after Meta announced another major restructuring that included 8,000 layoffs and large-scale internal AI workforce changes. CEO Mark Zuckerberg reportedly told employees the company is redesigning teams around AI-native workflows and autonomous agents.
Other technology companies including Cisco and Block have also recently linked workforce reductions to AI-driven operational changes.
The California order also arrives shortly after the state Senate passed the “No Robo Bosses Act,” legislation designed to prevent companies from firing or disciplining workers solely based on AI-generated decisions. Newsom vetoed a previous version of the bill last year.
Political Pressure Around AI and Labor
Labor organizations have increasingly pushed Democratic leaders to adopt stronger worker protections tied to AI adoption.
Earlier this year, AFL-CIO President Liz Shuler and labor groups in several Democratic primary states warned they could withhold support for a potential 2028 presidential campaign by Newsom unless he took stronger action on AI-related labor issues.
California Labor Federation President Lorena Gonzalez welcomed the new executive order but argued that additional action is still needed.
“We are glad that Governor Newsom is acknowledging the potential harm of AI on workers, but it’s not enough to just study the issue, we have to take action now,” Gonzalez said in a statement shared with CalMatters.
California Expands AI Governance Efforts
The latest order builds on Newsom’s broader AI policy push over the last two years, which has attempted to balance AI innovation with regulatory oversight.
The governor previously signed executive orders encouraging California agencies to adopt AI tools while simultaneously establishing safeguards around privacy, safety, and public sector deployment.
California has increasingly become one of the central battlegrounds for AI regulation in the United States as lawmakers, unions, and technology companies debate how automation should reshape employment, workplace protections, and corporate responsibility.
