The investment playbook your parents used is dead.
While the stock market continues hitting record highs, a seismic shift is reshaping the entire landscape of American capitalism – one that renders traditional “buy and hold” strategies dangerously obsolete.
The warning signs are everywhere: tens of thousands of workers losing their jobs to AI, half the public companies that existed 30 years ago have vanished, and entire industries are being reimagined by technology at breakneck speed. If you’re still investing like it’s 2005, you’re setting yourself up for failure.
The Great Corporate Culling of 2025
The numbers are staggering and they’re accelerating. Amazon announced 14,000 job cuts on Tuesday, citing a shift toward artificial intelligence, while UPS on the same day said it has reduced its workforce by 48,000 from a year earlier. Think about that – UPS, a company that seemed essential to modern commerce, eliminated 48,000 positions in a single year. The planned layoffs would also represent the biggest job cuts across the tech industry since at least 2020.
But Amazon’s cuts go deeper than headlines suggest. Amazon has over 350,000 corporate employees, according to a 2024 survey filed to the US Equal Employment Opportunity Commission, so the cuts represent about 4% of the company’s overall staff. CEO Andy Jassy isn’t just trimming fat – he’s fundamentally restructuring how one of the world’s largest companies operates. Jassy wants the company to remain nimble so it can adapt and change quickly as AI upends the technology sector.
The casualty list extends far beyond tech giants. Target is similarly planning to axe 1,800 corporate roles, while Paramount Skydance is set to slash about 1,000 positions, with layoffs beginning Wednesday. Even companies you wouldn’t expect are feeling the pressure. Online learning company Chegg said on Monday it had cut 45% of its global workforce — which amounts to 388 jobs — because new AI tools had significantly reduced web traffic previously generated by Google searches. When AI can replace nearly half your workforce overnight, no industry is safe.
Employers across the U.S. cut nearly 950,000 jobs this year through September, the largest number of layoffs since 2020.
We’re witnessing the end of what economists called the “no hire, no fire” era – that fragile period where job security seemed guaranteed even if new opportunities were scarce. That safety net has been shredded.
The Vanishing Public Market
Here’s a reality that should terrify traditional investors: the stock market you think you know is disappearing. At their peak in 1996, there were 7,300 publicly traded companies in the US. Today there are about 4,300.
We haven’t lost 40% of American companies – they’ve simply chosen to remain private, outside the reach of everyday investors.
In 1996, there were 30 public companies per million people in the U.S., but that number fell to only 14 in Q1 of this year, a 53% drop. Jamie Dimon, CEO of JPMorgan Chase, is so concerned he devoted significant space in his shareholder letter to this crisis. “The total should have grown dramatically, not shrunk,” wrote Dimon.
Today, we see significantly more U.S. private companies with over $1 billion in annual revenues compared to public companies and a substantial dispersion of the number of companies with over $100 million. In fact, 87% of U.S. companies with revenue greater than $100 million are privately owned. The best opportunities, the fastest-growing companies, the next Amazons and Apples – they’re staying private longer, sometimes forever.
Public investors interested in companies like Uber, Spotify, and Airbnb would have been required to wait over 10 years from their formation before purchasing shares.
By the time these companies go public, the explosive growth phase is often over. Early investors and private equity funds capture the lion’s share of returns, leaving public market investors with mature, slower-growing businesses.
Just two stocks, Apple and Microsoft, account for about 15% of the entire S&P 500. When your “diversified” index fund is this concentrated, you’re not spreading risk – you’re doubling down on a handful of tech giants that are themselves racing to automate away their workforces.
The AI Avalanche
The most chilling aspect of these layoffs is the reasoning behind them. Amazon CEO Andy Jassy said in June that the company plans to revamp its positions as it adopts AI, telling employees in a memo that Amazon would need “fewer people doing some of the jobs that are being done today, and more people doing other types of jobs.” This isn’t restructuring – it’s replacement.
About one-quarter of technology industry workers said they had experienced layoffs or role eliminations due to AI adoption during the past two years, according to a new study from career site Indeed. And we’re just getting started. The World Economic Forum this year surveyed 1,000 large companies worldwide, estimating 92 million jobs lost over the next five years as a result of AI adoption.
The corporate doublespeak is revealing.
Management experts have raised doubts about the true impact of AI on layoffs. “Very few companies are actually replacing people with AI right now,” Jessica Kriegel, chief strategy officer at executive advisory firm Culture Partners, told CNN.
“What we’re seeing instead are preemptive layoffs… Leaders want the financial runway to explore how AI might drive efficiency.” Companies are firing now to fund their AI experiments – betting that machines will eventually do the work cheaper and better.
Where Do 950,000 Workers Go?
This is the trillion-dollar question nobody wants to answer. When Amazon cuts 14,000 corporate jobs, when UPS eliminates 48,000 positions, when nearly a million Americans lose their jobs in nine months – where do they go?
The traditional answer was simple: they’d find work in emerging industries. Factory workers became service workers. Typists became data entry specialists. But what industry can absorb a million displaced workers when every sector is racing to automate?
“These larger corporate downsizings are happening at a time when there aren’t many job openings,” said Andy Stettner, director of economy and jobs at the Century Foundation. That means some workers who lose their jobs could struggle to find new employment. The ranks of long-term unemployed people, or those who have been searching for work for more than six months, are predicted to rise even higher from its August figure of almost 2 million, the highest level since 2022.
Can Healthcare Absorb Them?
It’s already implementing AI diagnostics. Education? AI tutors are proliferating. Finance? Algorithmic trading eliminated those jobs years ago. Even creative fields aren’t safe – AI is writing copy, designing graphics, and composing music.
The gig economy, once touted as the future of work, offers no salvation. When millions compete for the same delivery routes and ride-share fares, wages crater. We’re creating a massive underclass of formerly middle-class workers competing for scraps.
Why Buy and Hold Is a Suicide Strategy
In this environment, parking your money in an index fund and forgetting about it isn’t investing – it’s gambling that the few remaining public companies will somehow generate returns despite operating in an economy where millions of consumers have lost their purchasing power.
The traditional wisdom assumed several things that are no longer true: that public markets offer broad diversification, that economic growth lifts all boats, that companies need large workforces to scale, and that consumer spending will remain stable. Every one of these assumptions has been shattered.
Your 401(k) invested in “diversified” index funds is actually concentrated in a shrinking pool of aging companies. The average age of a listed firm was 12 years at the peak of listings. Now, the average age is 20 years. Older firms invest less in fixed assets and pay out more. You’re buying into companies focused on extracting value, not creating it.
Meanwhile, the real growth happens in private markets many investors can’t access. The next generation of innovative companies are funded by private equity, capturing their explosive growth phase before ever considering going public. By the time you can buy shares, the opportunity is largely gone.
Prepare Now or Perish Later
AI isn’t coming – it’s here. The disruption isn’t approaching – it’s happening. While politicians debate and pundits pontificate, corporations are ruthlessly restructuring for a future where human labor is optional. Every day you delay adapting your investment strategy is a day closer to obsolescence.
Stop thinking in terms of traditional asset allocation.
Look for ways to invest in private companies and real assets.
Invest in assets that have real value that can’t be automated.
Because when the dust settles from this economic transformation, the winners won’t be those who held index funds – they’ll be those who saw the change coming and positioned themselves accordingly.
The old investment playbook assumed a stable, growing economy with broad-based prosperity. That world is gone. The question isn’t whether you’ll adapt your investment strategy to this new reality – it’s whether you’ll do it in time.