Global economic researchers are issuing urgent warnings that the rapid corporate adoption of artificial intelligence could trigger a self-defeating cycle of layoffs and collapsing consumer demand. In a paper titled The AI Layoff Trap, published by the Wharton School, economists Gerry Tsoukalas and Brett Falk argue that while individual firms face a competitive imperative to automate their workforces to avoid falling behind rivals, the collective result will be a severe erosion of the purchasing power necessary to sustain those businesses. Tsoukalas, speaking on a recent episode of the New Normal podcast, emphasized the fundamental economic paradox: if automation displaces workers en masse, the consumer base required to purchase corporate outputs will simultaneously vanish. The dilemma mirrors a classic economic trap where automating remains a dominating strategy for each firm regardless of industry behavior, yet universal adoption threatens market collapse. Researchers caution that relying on corporate self-regulation is ineffective and have proposed targeted policy interventions. Potential measures include implementing taxes on AI-driven workforce reductions or offering subsidies to companies that retain human employees, providing structural incentives to stabilize the labor market. These findings align with broader institutional concerns regarding the pace of technological disruption. A July report from the World Economic Forum highlighted that traditional reskilling initiatives are failing to match the velocity of AI-driven role transformations. The report argues that the labor market conversation has misdirected focus for years by asking which specific roles will survive, rather than questioning whether the job itself remains a viable economic unit. Economists are urging a paradigm shift from job retention to livelihood sustainability, distinguishing between an economy that merely deploys human labor and one that actively sustains it. The scale of the impending transition is stark. WEF projections indicate that by 2030, nearly sixty percent of the global workforce will require significant reskilling, while approximately eleven percent will lack access to retraining programs. This disparity places over one hundred twenty million workers at medium-term risk of redundancy, underscoring the urgent need for coordinated policy frameworks that address both technological deployment and socioeconomic stability. As corporate AI adoption accelerates, the intersection of automation economics and labor policy will likely define the next phase of global market evolution.