Layoffs have been piling up recently, especially in the tech world, with the words “artificial intelligence” accompanying more and more notices about the cuts. This trend is unnerving workers across sectors, who fear what the rapid adoption of AI will mean for their job prospects. Even if AI isn't replacing people directly, some businesses have announced reductions as they redirect money to the technology or tout new ways to streamline operations, raising alarm about what might be left over for payrolls and future openings.
Corporate explanations are often vague, with AI rarely the sole reason cited for layoffs. Most companies still point to wider corporate restructuring or macroeconomic headwinds. Some executives have suggested that while they’re making cuts to move around resources now, AI and its demand could open up new roles down the road. However, it’s hard to know if that’s the real driver or just the message a business wants to tell Wall Street.
On Wednesday, Cisco Systems announced plans to cut under 4,000 jobs, or about 5% of its workforce. The announcement arrived the same day the tech giant unveiled record revenue for its third fiscal quarter, amid soaring demand for its AI tools and infrastructure. CEO Chuck Robbins told employees in a memo that “the companies that will win in the AI era will be those with focus, urgency, and the discipline to continuously shift investment,” which meant “making hard decisions.” He added that Cisco would help impacted employees find new opportunities, “whether internal or external.”
Financial services provider Block in February moved to lay off more than 4,000 of its 10,000-plus employees. The parent of payment platforms like Square and Cash App was vocal about reconfiguring to capitalize on AI. “The core thesis is simple. Intelligence tools have changed what it means to build and run a company,” CEO Jack Dorsey said in a letter to shareholders. “A significantly smaller team, using the tools we’re building, can do more and do it better.”
Not only tech companies have pointed to AI when initiating layoffs. In January, chemicals maker Dow Inc. announced plans to cut about 4,500 jobs as part of a broader push to “streamline” operations, including putting more emphasis on AI and automation. Also in January, Pinterest said it would lay off under 15% of its workforce as the company pivots more of its money to AI. The image-sharing platform said the cuts were part of broader “transformation initiatives,” which included reallocating resources to AI-focused roles and prioritising AI-powered products. Last fall, Lufthansa Group said it would shed 4,000 jobs by 2030, pointing to the adoption of AI, digitalisation, and consolidating work among member airlines.
While perhaps not explicitly tying the technology to recent layoff announcements, other big names including Meta, Microsoft, and Amazon are also cutting thousands of jobs while investing billions of dollars toward AI. Meta, for example, plans to lay off about 8,000 workers, or about 10% of its workforce, starting next week. When announcing the cuts last month, the Facebook owner more broadly cited the need to offset certain investments and broader efficiency. The move arrives as Meta continues to ramp up spending on AI infrastructure and highly-paid AI expert hires. Earlier this year, CEO Mark Zuckerberg said 2026 will be when “AI starts to dramatically change the way that we work.”
