I think the reality is less like a switch and more like there are just certain jobs that get easier and you just need fewer people overall.
And you DO see companies laying off people in large numbers fairly regularly.
Sure but, so far, too regularly to be AI-gains-driven (at least in software). We have some data on software job postings and the job apocalypse, and corresponding layoffs, coincided with the end of ultra-low interest rates. If AI had a recent effect this year or last, its quite tiny in comparison.
https://fred.stlouisfed.org/graph/?g=1JmOr
so one can argue more is to come, but its hard to see how its had a real effect on jobs/layoffs thus far.