California Governor Gavin Newsom has signed a new executive order aimed at addressing the growing impact of artificial intelligence on the job market.
The order is designed to help workers, small businesses, and local communities prepare for the economic changes created by AI. It comes at a time when many companies in Silicon Valley are cutting jobs and restructuring their teams around automation and productivity.
The initiative brings together universities, economists, labor experts, state agencies, and industry leaders. Their role will be to study how AI is changing employment, identify which sectors are most exposed, and develop policy proposals to support workers affected by these changes.
The main goal is to make sure the benefits of AI are not limited only to technology companies. California wants workers to benefit from productivity gains as well, especially in industries where automation could replace or reduce human labor.
Some of the ideas being considered include stronger severance rules, employment insurance, and transition payments for workers who lose their jobs because of AI adoption. Other proposals include worker ownership models, broader job training programs, and universal basic capital initiatives.
The order also focuses on improving access to labor market data. Better information on hiring, payrolls, and job reductions would allow the state to detect early signs of workforce disruption and respond faster.
California’s Employment Development Department will create a public dashboard to track the impact of AI across different industries. The state’s labor and workforce agencies will also review possible updates to the California Worker Adjustment and Retraining Notification Act within 180 days.
Another part of the plan includes creating an AI playbook for workforce training, together with a single online portal where people can access public employment and support services.
The move comes as layoffs across the technology sector continue to rise. More than 114,000 jobs have reportedly been cut across 150 tech companies in 2026.
Several companies have recently announced major reductions. ClickUp cut 22% of its workforce, while Intuit announced 3,000 layoffs. Meta also reportedly reduced its workforce by 8,000 jobs this week.
California is one of the most important AI hubs in the world, with many leading private AI companies based in the state. This puts it at the center of both the opportunity and the disruption created by artificial intelligence.
The new executive order is an early attempt to prepare the labor market for a future where AI plays a larger role in business operations, productivity, and employment decisions.
