Six months into 2025, the tech trade has seen 1000’s of layoffs as giants corresponding to Microsoft, Google, Meta, IBM, PwC, and Chegg Inc. make sweeping cuts.
Whereas AI changing people is commonly cited because the offender, consultants say the truth is extra advanced: these firms are liberating up capital to rent AI as a substitute. It could look like a neat distinction—and can undoubtedly be chilly consolation to those that misplaced their jobs—however these consultants say that these firms want the funds to make massive bets on AI. Partly, they’re hiring a brand new workforce. The tech CEOs who’re making the layoff selections are largely providing a darker worldview, confirming that automation is coming for the white-collar workforce.
Microsoft‘s AI ambitions
Microsoft has been on the heart of this 12 months’s layoff wave, letting go of practically 6,000 staff in Might, adopted by one other 9,000 in July—amounting to nearly 4% of its world workforce.
CEO Satya Nadella has brazenly mentioned the corporate’s AI transformation, revealing that AI now writes 20% to 30% of Microsoft’s code. This shift has sparked debate concerning the future want for human engineers, as the corporate reallocates sources to fund an $80 billion AI infrastructure push this 12 months.
Monetary technique and restructuring
Trade consultants like Deedy Das of Menlo Ventures argue that the layoffs are much less about AI changing staff and extra about liberating up capital for AI investments.
Tech commentator Wes Roth echoed the sentiment: “This isn’t about AI changing people but—it’s about restructuring to fund AI initiatives.” Microsoft’s method is mirrored throughout the sector, with firms together with Amazon flattening administration layers and prioritizing technical roles over administrative ones.
Das and Roth didn’t reply to requests for remark.
IBM has minimize round 8,000 jobs in HR and different departments, as AI instruments take over routine administrative duties. Nevertheless, the corporate is concurrently hiring extra engineers and salespeople, signaling a shift towards roles that require creativity and complicated decision-making.
Google and Meta have additionally made vital cuts, with Meta shedding 3,600 staff initially of the 12 months and Google decreasing a whole lot of roles in its Android, Pixel, and Chrome groups. Each firms cite the necessity to streamline operations and spend money on AI as key causes.
PwC and Chegg Inc. have joined the layoff pattern, with PwC slicing roughly 1,500 jobs and Chegg decreasing its workforce by 22% as college students more and more flip to free AI-powered research instruments.
What they’re saying
As AI turns into extra central to enterprise operations, tech firms are redefining what productiveness means. Tech CEOs and thought leaders have been outspoken this 12 months about how AI is reshaping their sector with the unambiguous message that at the very least some jobs are being essentially displaced. There may be nonetheless a debate about whether or not they’re being eradicated for good.
Meta’s Mark Zuckerberg mentioned AI may very well be prepared this 12 months to “successfully be a kind of mid-level engineer,” able to writing code. Andy Jassy mentioned Amazon “will want fewer individuals doing among the jobs which might be being accomplished at the moment,” whereas Ford’s Jim Farley and Anthropic’s Dario Amodei individually predicted that AI is about to displace primarily half of all white-collar positions.
It’s not all doomsday predictions. Invoice Gates see an period of “free intelligence” coming as AI will turn into able to dealing with most duties. Nvidia’s Jensen Huang mentioned AI will “change everybody’s job — it’s modified mine.” The 1000’s of tech staff which were laid off thus far in 2025 are watching and ready.
For this story, Fortune used generative AI to assist with an preliminary draft. An editor verified the accuracy of the knowledge earlier than publishing.
