Meta CEO Mark Zuckerberg (left) and Microsoft CEO Satya Nadella.
Getty Images | Reuters
The more than 20,000 potential job cuts Meta And Microsoft revealed Thursday, months later Amazon announced its most massive layoffs ever, this may just be the beginning.
The same companies that are collectively spending hundreds of billions of dollars per year to build artificial intelligence infrastructure to meet the growing demand for AI services are seeking AI efficiencies by downsizing their workforce. They are also still trying to downsize in the face of excessive hiring fueled by the pandemic.
Many economists and industry experts fear that a labor crisis might be upon us today – but not in the future – given how quickly AI is spreading across corporate America. As of this week, more than 92,000 tech workers have been laid off so far in 2026, according to Layoffs.for infobringing the total to nearly 900,000 since 2020
“This represents a fundamental structural change rather than a temporary market correction,” said Anthony Tuggle, an executive coach and leadership expert who previously worked in the AI field. “We are witnessing the start of a permanent transformation in the way work is organized and executed across all sectors.”
Work-related anxiety has been on the rise since OpenAI launched ChatGPT in late 2022, demonstrating the expanded capabilities of chatbots powered by new AI models. Workplace fears began to intensify last year as Anthropic Claude The tools began doing the work of entire divisions of the company and raised the specter that large swathes of existing software solutions could be in use. peril.
Techno-optimists argue that AI reshapes human work, not replaces it. And just like in previous waves of massive industrial disruption, new jobs will be created to meet the needs of a changing economy. After all, mobile app developers didn’t exist before smartphones. And what were IT administrators used for before creating servers?
At the very least, there appears to be a growing gap between job losses and job gains in the AI era. A 2026 movement recruitment study showed that AI adoption slows recruiting for entry-level and generalized IT positions, while AI positions are in high demand. Salaries for technicians remain largely stable starting in 2025, with the exception of some specialized jobs like AI engineers, the report said.
Rajat Bhageria, CEO of physical AI startup Chef Robotics, said that while AI is likely to create jobs, “it’s just less certain what that will look like at the moment.”
“We are only beginning to understand how much of our daily work AI can handle for us across all types of jobs,” Bhageria said.
Meta only hinted at AI in its Thursday announcement. The company informed its employees in a memo that it plans to lay off 10% of its workforce, or about 8,000 jobs, with cuts beginning May 20, “all part of our ongoing efforts to run the business more efficiently and allow us to offset other investments we’re making.” The company is also abandoning plans to fill 6,000 vacant positions, according to the memo.
By the time the new Meta arrived, Microsoft confirmed that it will offer voluntary buyouts, a first for the 51-year-old software giant. About 7% of U.S. employees are eligible, according to a person familiar with the plans who asked to remain anonymous because the figure is not made public. With approximately 125,000 employees in the United States, that could amount to as many as 8,750 job losses.
Nike too?Tech jobs aren’t just at risk in the tech sector.
Nike announced a new round of layoffs Thursday affecting about 1,400 employees across the company, primarily concentrated in its technology department.
“These reductions are very difficult for the teammates directly affected as well as the teams around them,” COO Venkatesh Alagirisamy told employees.
Recent job search site Glassdoor Employee Confidence Index showed the technology sector saw the largest year-over-year decline in confidence of any sector, falling 6.8 percentage points in March from a year earlier, to 47.2%.
Daniel Zhao, Glassdoor’s chief economist, said fewer people are leaving their jobs, fearing an unstable market, a dynamic that comes at a cost to employee morale and job satisfaction. It also means more job cuts.
“Since natural attrition doesn’t happen as much, companies are more aggressive in pushing people out the door,” Zhao said. “From explicit layoffs to raising the bar on performance reviews, employers are taking a range of steps to reduce labor costs.”
Evan Spiegel, CEO of Snap Inc., attends the annual Allen and Co. Sun Valley Media and Technology Conference at Sun Valley Resort in Sun Valley, Idaho, July 9, 2025.
David A. Grogan | CNBC
Instant I said last month that it would reduce 16% of its workforce, or around 1,000 employees, and that at least 300 vacant positions would be eliminated. CEO Evan Spiegel cited AI-related efficiencies in a letter to staff. Sales force licensed 4,000 customer support positions in September, with CEO Marc Benioff saying, “I need fewer heads.”
Oracle said in March that it was dismissal thousands of employees as it increases spending on AI. The company’s core software business is the target of market panic over AI displacement. Meanwhile, the company is trying to compete with hyperscalers in the AI infrastructure market and is facing pressure from investors over the amount of investments. debt it increases, parallel to its decrease in cash flow.
Cutting 20,000 to 30,000 jobs could generate between $8 billion and $10 billion in additional free cash flow for Oracle, TD Cowen analysts wrote in a January note.
Leading the pack among tech companies, Amazon has cut at least 30,000 jobs since October, which represents around 10% of its workforce in business and the technology sector. In between mass layoff announcements, phased layoffs were carried out across the company, albeit on a smaller scale. Google has also made small but regular cuts since 2023.
But the spending continues.
Alphabet, Microsoft, Meta And Amazon should pay almost 700 billion dollars combined this year to power the build of their AI infrastructure. The companies are all expected to report quarterly results on Wednesday and can expect questions from analysts about updated spending plans as well as future layoffs.
Unicorns for 50 peopleIn the startup world, the AI boom is creating a very clear pattern: companies are growing much faster with much fewer employees. Venture capitalists say companies that don’t operate according to this philosophy have a much harder time raising money.
Zach Bratun-Glennon, a partner at venture capital firm Gradient, said it’s possible to have a working customer relationship management app up and running in a day.
“We’re seeing companies that can hit $50 million in revenue with about 50 employees, whereas before, for a software company, a 250-person company,” he said. “Do I think there will be unicorns and decacorns of 50 or 100 people? Absolutely. Can you create a public company with 200 employees? Absolutely.”
Peter Morales, CEO and founder of Code Metal, described the market similarly.
“Today the trend is small teams growing revenue faster than ever,” he said.
At Silicon Valley’s largest companies, where headcounts can easily exceed 100,000 people, developers are well aware of this trend. They have access to the same mood coding tools as neighboring startups and see new products coming to market at breakneck speed.
The breakneck pace of change and disruption creates understandable levels of job insecurity, Glassdoor’s Zhao said.
“This is a bit of an unusual tech boom where people participating in it are feeling pretty worried about what’s going on,” Zhao said. “Many workers feel stuck right now.”
— CNBC’s Annie Palmer, Jordan Novet, Lora Kolodny and Jonathan Vanian contributed to this report.
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