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The executive order serves as a worker-protection counterweight to what’s perceived as federal AI industry-first protections.

In sum – what to know:

• The order lacks legislative teeth – it does not mandate for sweeping, restrictive laws, but rather calls for stakeholders to gather and share information;
• The order is a ‘first step’ – a data-gathering exercise to establish early-warning systems for job displacement and loose recommendations for what to do about those warnings.
• Attempt to share the wealth – It calls on frameworks that will enable workers to share in AI-driven gains and protect them from AI-driven losses.

Just as the Trump administration scrapped plans today for an executive order to vet powerful new AI models before they are released publicly, Governor Newsom issued executive order N-6-26 – a potential counterweight to what the public increasingly perceives as a federal government disproportionately protective of big tech over workers. With the order, Newsom attempts to leverage the state’s massive buying power – as the largest economy in the nation – to bypass a gridlocked legislature and counter federal policies that labor unions and tech employees feel unfairly prioritize big-tech valuations and revenues over workforce and small-business protections.

It also aims to stem the hemorrhaging of tech jobs as California-based giants like Meta, Cisco, Intuit, Intel, Alphabet, Salesforce, and Oracle (which moved to TX, but still has a large employee presence in CA) lay off massive numbers of people to fund AI Capex, which RCRTech has extensively covered the past few months. There’s also been a growing shift toward AI server and silicon businesses, which is also suspected of driving the ongoing workforce cuts in California.

Tracking metrics from workplace analysts like Challenger, Gray & Christmas and California WARN Act filings provides an emerging picture, with about 5,000 tech job cutbacks in San Francisco Bay in the first few months of 2026 and 173,022 total job cuts in California over the last annual tracking cycle. The Public Policy Institute of California said information and tech sector jobs have plummeted 17% in the past four years.

Though the order aims to stem losses and retrain, repurpose, and educate the California workforce, it will most likely sharpen the conflicts between policymakers who demand more worker and societal protections, and those who demand less regulation and more empowerment of AI innovators.

Amid historic valuations and revenues, there is an intense conflict of interest brewing, since tech revenues are a major feed to California’s massive $350 billion budget, which is fueled by the fact 33 of the top 50 private AI companies in the world are located in California.

More bark than bite?

Some will portend that the executive order will have little impact, especially if AI leaders lobby the Trump administration to exert legal and financial pressure to cut back any rules that may choke innovation, valuations, and profit margins. In addition, AI giants could do what they’ve done in the past, which is to threaten to leave the state if aggressive proposals aren’t called back.

On the other side, labor advocates – already alienated by Newsom’s previous vetoes of algorithmic workforce regulations – will advocate for this order and more beyond it. They will consider it a good first step, but they will continue to push for something more concrete, like legislative mandates that go further than studies and frameworks. In addition, a public frustrated with their economic standing, debt and spiking prices, wants to see action taken.

In an effort to balance workforce protections against industry needs, the executive order tasks labor experts, universities, and economists to partake in a massive data-gathering exercise around:

• Severance standards
• Employment insurance
• Transition support for displaced workers
• Worker ownership models
• Universal basic capital concepts
• Expanded workforce training
• Stronger tracking of hiring and payroll trends

Whether the data collected will feed new, stringent certification standards remains to be seen, but so far, state agencies have not been mandated to create new rules in any tangible fashion. What it does is direct stakeholders to build frameworks that “ensure workers share in the gains created by AI-driven productivity,” but it leaves a high degree of regulatory ambiguity.

Notably, the executive order dovetails with California’s recent “Engaged California” program, a statewide call for Californians to share details on how AI is affecting their work – feedback Newsom claims will be used to inform and guide state policy leaders on AI policy.

In addition to California residents’ feedback, the order calls on state agencies to take the following actions:

• Evaluate and support opportunities to expand and enhance worker ownership models to support broad-based capital growth and build wealth from productivity gains among workers, including employee-owned company structures. 
• Support small businesses through educational and incentive opportunities on best practices and applications for using emerging technology to support competition and broad-based economic growth, while supporting workforce training and retention.
• Identify ways the collective bargaining process has delivered positive outcomes for workers. 
• Add more on-the-job training and AI preparation in higher education.

In better understanding AI’s impact on the workforce, through aforementioned warning signals of potential labor disruptions, those actions “should be drafted in consultation with labor, industry, and academic experts.” Specifically, it asks for a “dashboard” that represents the impact of AI across sectors, with a 180-day recommendation on revisions and updates to the WARN Act.

The order posits that the state’s monthly jobs report will assess the role of technology in workforce decisions, which will include policy review so that workers have a “safety net,” including severance and other forms of compensation such as stock or other forms of equity.

The order also pushes for campaigns to “raise awareness” about employment insurance programs, including employment stability payments. In that vein, the order says a “single online platform” will be created to simplify access to government services for Californians find what they need when looking for new work opportunities and sustenance in-between layoffs/firings and new employment.

Additionally, Newsom calls for the expansion of “worker ownership models,” namely through broad-based capital growth that creates wealth from productivity gains among workers, including employee-owned company structures. The order calls for an assessment of the ways in which the collective bargaining process has delivered positive outcomes for workers. 

AI for the public good

In addition to calling on all stakeholders to develop frameworks to directly help workers and employers better prepare and repurpose people for AI-related jobs, the order also calls on academics and the private sector to “develop recommendations for altering incentive structures and increasing the likelihood of AI development and deployments that advance the public good and address critical problems facing society.” To that point, the order acknowledges that the incentives that currently shape private-sector decision making, as well as the development and deployment of AI, don’t always prioritize the public good, especially when considering the “concentration of computing power among a handful of private actors and the prohibitive costs of developing AI ecosystems at scale.”

Even if the order doesn’t tangibly, at this point, outline how that “public good” can be regulated or mandated, it attempts to spur public and private-sector discourse about the key tenets it outlines as critical to balancing industry innovation with the need to protect workers and the public.

As stated earlier, the order is widely seen as a first step toward data gathering about how fast AI is automating away administrative and white-collar sectors, but it currently lacks any teeth. While AI leaders probably appreciate that Newsom did not pass sweeping, restrictive laws through this executive order, they may be wary of how policy recommendations eventually restrict corporate restructuring or mandate expensive workforce retraining funds.

RCRTech will follow the story as it evolves.