California is drawing a line in the sand on AI-driven job losses — not with new regulations, but with a sweeping government study that could reshape the relationship between workers, employers, and the machines poised to replace them.
On May 21, Governor Gavin Newsom signed Executive Order N-6-26, directing state agencies to develop policy recommendations for protecting workers displaced by artificial intelligence. The order — issued one day after Meta laid off roughly 8,000 employees with CEO Mark Zuckerberg citing AI as a factor — tasks the Labor and Workforce Development Agency with reviewing severance standards, unemployment insurance, worker ownership models, and a concept the governor called "universal basic capital," which would give residents a direct stake in assets like corporate stocks, bonds, or public wealth funds.
"California has never sat back and watched as the future happened to us — and we won't start now," Newsom said in a statement accompanying the order. "This moment demands that we reimagine the entire system — how we work, how we govern, how we prepare people for the future."
The executive order is the first of its kind issued by a U.S. governor, according to Newsom's office, and arrives amid an accelerating wave of AI-linked layoffs across the tech industry. Meta, Cisco, Block, Intel, and Amazon have all slashed headcounts in recent months, with executives citing the need to redirect spending toward AI infrastructure and talent. Anthropic co-founder Dario Amodei has predicted that roughly half of all white-collar jobs could vanish within five years, a timeline most tech leaders dispute but whose underlying direction few contest.
What the Order Does — and Does Not Do
The order creates no immediate legal obligations for private employers. Instead, it sets in motion a series of government reviews with specific deadlines. Within 180 days — by mid-November 2026 — the LWDA must deliver recommendations on revisions to California's Worker Adjustment and Retraining Notification (WARN) Act, the law requiring employers to give advance notice of mass layoffs, to make it more responsive to AI-driven disruption. The agency must also review safety net policies including severance, equity-based compensation, and subsidized employment programs, with a comparative analysis of international practices.
By October 15, 2026, the LWDA is directed to review how collective bargaining agreements are addressing AI adoption, including how workers' voices factor into decisions about deploying new technology. The order also calls for a new public dashboard tracking AI's impact across economic sectors, expanded business feedback in the state's monthly jobs report, and modernized job training programs targeting workers in customer service, software development, marketing, and sales.
The order further directs the Governor's Office of Business and Economic Development to evaluate worker ownership models — including employee-owned company structures — as mechanisms for sharing AI-driven productivity gains more broadly.
California already hosts 33 of the top 50 private AI companies in the world, making the state both the epicenter of the technology's development and the front line of its workforce consequences.
Labor Leaders: Study Is Not Enough
Labor organizations offered a measured response. Lorena Gonzalez, president of the California Labor Federation, AFL-CIO, acknowledged the order while pressing for faster action. "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. Catastrophic job loss from AI is not inevitable, it's a political choice," she told CalMatters.
The political context is unmistakable. In February, AFL-CIO President Liz Shuler and Gonzalez delivered what amounted to an ultimatum: regulate AI or lose organized labor's support for any future Newsom presidential campaign. The executive order was signed just two days after the California Senate passed the No Robo Bosses Act (SB 947), which would prohibit businesses from using AI decisions as the sole basis for firing or disciplining workers — a successor to a similar bill Newsom vetoed last fall.
Legal Experts Flag What Comes Next
Employment law attorneys are watching the WARN Act review closely. The law firm Fisher Phillips noted that California already has pending legislation — SB 951 — that would create WARN Act-style notice requirements specifically tied to AI-driven displacement. The executive order's 180-day review window could either slow that bill's momentum by arguing the Legislature should wait for the LWDA's analysis, or accelerate it by providing supporting data.
On collective bargaining provisions, Fisher Phillips flagged a significant legal constraint: California almost certainly cannot mandate that private-sector employers bargain with unions over AI adoption, since federal law governs private-sector labor relations. But the state could study union contract provisions on AI — advance notice of deployments, retraining commitments, severance floors — and then impose those same requirements on all employers through state employment law, sidestepping federal preemption entirely.
A Federal Vacuum
The timing underscores a growing divergence between state and federal approaches to AI governance. On the same day Newsom signed his order, President Trump postponed signing a long-anticipated federal AI executive order, telling reporters he did not like what he was seeing. Trump has previously signed an executive order attempting to curtail states' ability to regulate AI, though it did not directly preempt state laws.
That federal vacuum has left California — home to Silicon Valley and the largest state economy in the nation — as the de facto laboratory for AI workforce policy. Newsom's order also launched a statewide expansion of Engaged California, a public input platform, to gather residents' views on AI's workforce impact and inform the policy recommendations to come.
Whether Executive Order N-6-26 ultimately produces binding rules or remains a political document will depend on what the LWDA delivers in November — and whether the Legislature waits for those findings or moves on its own. For now, the order signals that California is treating AI-driven job displacement not as a distant possibility but as an active policy emergency, even if the policy response is still taking shape.
“Catastrophic job loss from AI is not inevitable, it is a political choice.”— Lorena Gonzalez, President, California Labor Federation