California Gov. Gavin Newsom signed a first-of-its-kind executive order on Thursday, directing state agencies to prepare the state’s workforce, small businesses, and communities for potential economic disruption driven by artificial intelligence (AI).
The order establishes a collaborative coalition of state agencies, labor experts, economists, universities, and industry leaders tasked with gathering data, tracking sector-specific impacts via a new digital dashboard, and flagging early signs of workforce displacement. Notably, state officials have 180 days to provide recommendations on updating California’s Worker Adjustment and Retraining Notification (WARN) Act to better serve as an early-warning system.
The administration is exploring an array of progressive safety nets to shield workers — particularly white-collar employees, who face unprecedented vulnerabilities.
Policy options under review include enhanced severance standards, expanded unemployment insurance, tailored retraining initiatives, worker ownership models, and a framework Newsom termed “universal basic capital,” which would grant residents a stake in assets like corporate stocks or wealth funds.
“California has never sat back and watched as the future happened to us — and we won’t start now,” Newsom, a Democrat, said. “This moment demands that we reimagine the entire system — how we work, how we govern, how we prepare people for the future.”
The state’s proactive stance arrives amid severe tightening in the tech sector, where companies are reallocating payroll budgets toward AI infrastructure and talent.
Meta Platforms Inc. recently announced it would slash roughly 8,000 jobs, about 10% of its workforce, in an accelerated pivot to AI. Industry peers like Amazon.com Inc., Intel Corp., and Cisco Systems Inc. have mirrored these workforce reductions. Observers note that white-collar payrolls have contracted for 31 consecutive months, a stretch unparalleled outside of a macroeconomic recession.
Experts warn that the trend will expand; Anthropic co-founder Dario Amodei recently predicted that up to half of all white-collar jobs could be eliminated within five years.
The order has drawn mixed reactions. Lorena Gonzalez, president of the California Federation of Labor Unions, AFL-CIO, welcomed the administration’s recognition of collective bargaining but challenged the fatalism surrounding automation. “Catastrophic job loss from AI is not inevitable, it’s a political choice,” Gonzalez said, noting that Newsom had previously blocked similar legislative safeguards.
Furthermore, California’s aggressive regulatory posture may trigger friction with federal oversight. While Newsom’s previous actions focused on public safety, privacy, and state procurement guidelines, the Trump administration has maintained a hands-off approach to the AI sector, actively seeking to preempt state-level restrictions.
President Trump on Thursday abruptly postponed signing a highly anticipated executive order on AI, fearing the regulations would stifle domestic innovation and harm America’s competitive edge over global rivals like China.
The president canceled the scheduled Oval Office event after reviewing the draft, telling reporters he rejected certain elements to ensure the government doesn’t create a “blocker” for the industry. “We’re leading China, we’re leading everybody, and I don’t want to do anything that’s going to get in the way of that lead,” Trump said.
While officials did not specify the exact points of contention, sources familiar with the draft told CBS News it focused on securing Pentagon and civilian federal systems. Notably, it also proposed a voluntary framework for AI developers to collaborate with the government prior to releasing major models. It remains unclear when a revised order will be introduced.
To engage the public, the state is expanding “Engaged California,” a digital platform originally utilized during the 2025 Los Angeles wildfire recovery, to gather resident feedback on how AI is actively reshaping the state’s economic fabric.
