Six months into 2025, layoffs at huge tech are already making headlines. The narrative that AI is driving widespread job cuts has gripped the tech business, with corporations reminiscent of Microsoft, IBM, Chegg, Workday, CrowdStrike, PwC and Klarna citing AI as an element of their workforce reductions.
In accordance with Layoffs.fyi, over 50,000 tech staff have been laid off in 2025.
Microsoft is reportedly eliminating round 3% of its workforce, impacting roughly 6,000 staff throughout varied roles, groups, and areas.
In accordance with a WARN layoff discover from Washington, the place Microsoft is headquartered, the job cuts will have an effect on 1,985 staff within the state—1,510 working from places of work and 475 in distant roles.
Notably, a developer who spent almost twenty years at Microsoft and helped make TypeScript 10 occasions quicker was additionally amongst these laid off.
“After 18 years at Microsoft, with roughly a decade of that point engaged on TypeScript, I’ve sadly been let go within the newest spherical of layoffs. I must take a number of days to course of earlier than I begin searching for work,” he wrote in a put up on X.
AIM reached out to Microsoft for his or her response, however didn’t obtain one by the point of publication.
Is AI to Blame?
Whereas some say AI-driven effectivity is behind the layoffs, others cite the price of constructing AI infrastructure that’s making corporations scale back headcount. “This isn’t about AI changing people but—it’s about restructuring to fund AI initiatives. Microsoft plans to spend $80 billion on AI this fiscal 12 months,” Wes Roth wrote on X. He additionally famous that analysts anticipate over 10,000 job cuts yearly if such spending continues.
In accordance with Deedy Das from Menlo Ventures, the rising value of capital and the necessity to make massive capital expenditure bets in generative AI infrastructure, significantly chips, are prompting corporations to rethink their hiring methods. He additional added that beneficial properties in AI productiveness could scale back the necessity for proportional headcount development.
“Is that this the brand new regular?” he requested, questioning whether or not Microsoft really wants 4 lakh staff to double its enterprise in comparison with when it had simply 2 lakh staff. Notably, Microsoft chief Satya Nadella just lately stated that as a lot as 30% of the corporate’s code is now written by AI.
“I’d say possibly 20-30% of the code that’s inside our repos in the present day and a few of our tasks are most likely all written by software program,” Nadella stated throughout a current dialog with Meta CEO Mark Zuckerberg.
Earlier this 12 months, main tech corporations, together with Google and Meta, had introduced layoffs.
Google laid off 200 staff from its world enterprise organisation, which handles gross sales and partnerships. In April, the corporate lower a whole lot of roles in its Platforms and Units unit, answerable for Android, Pixel, and Chrome operations.
In the meantime, Meta let go of three,600 staff—about 5% of its workforce—specializing in performance-based cuts and inside restructuring.
Each corporations are investing closely in AI infrastructure in 2025. Zuckerberg introduced plans to take a position $60-$65 billion in capital expenditure throughout 2025 to increase the corporate’s AI infrastructure and computing capabilities.
However, Google plans to take a position $75 billion in information centre infrastructure.
PwC lower 1,500 jobs throughout the US, citing overhiring in the course of the pandemic and a shift in direction of automation. One of many affected staff instructed AIM that no particular motive was given. The layoff electronic mail merely referred to market challenges and inside restructuring, and the termination occurred that very same day.
One other worker who was laid off final 12 months instructed AIM, “It’s pathetic on their half. Whereas hiring, they take 4 rounds of interviews and weeks to onboard, however in the case of firing, a single name lasting only a few minutes was sufficient to ship the information.”
IBM chief Arvind Krishna, in a current interview with The Wall Avenue Journal, stated the corporate has changed 200 human assets staff with AI brokers.
As a substitute of shrinking, IBM’s workforce has expanded as the corporate has reinvested the assets freed up by layoffs into hiring extra programmers and gross sales personnel. “Our whole employment has really gone up, as a result of what [AI] does is it provides you extra funding to place into different areas,” Krishna instructed WSJ.
In accordance with IBM’s chief human assets officer, Nickle LaMoreaux, this shift doesn’t imply jobs will disappear solely. “Only a few roles can be fully changed,” she stated. As a substitute, AI is anticipated to deal with routine duties, permitting staff to focus on tasks that contain judgment and decision-making.
In the meantime, ed-tech platform Chegg introduced that it’s planning to put off 248 staff, or roughly 22% of its workforce, to scale back bills and simplify operations, as extra college students shift from conventional edtech providers to instruments like ChatGPT.
Equally, language studying platform Duolingo introduced that it’s going to section out human contractors for duties that may be dealt with by AI, as a part of a broader shift to an “AI-first” strategy. Greater than doubling its whole choices, the corporate just lately added 148 new language programs in its largest content material growth thus far, crediting AI for the achievement.
The Greater Image
The reality possible lies in a gray space. As seen at corporations reminiscent of Chegg and CrowdStrike, AI is automating duties like coding, customer support, and information evaluation—particularly jobs that when relied on human labour. Nevertheless, the dimensions of so-called “AI layoffs” is usually exaggerated.
Whereas AI’s impression on job displacement is actual, some analysts and insiders imagine corporations are utilizing AI as a handy excuse for layoffs pushed by different strategic or monetary causes.
For example, Klarna, the favored buy-now-pay-later platform, is adjusting its strategy after leaning closely on AI for customer support. CEO Sebastian Siemiatkowski just lately shared that the corporate intends to convey human brokers again into the loop, acknowledging that over-reliance on AI could have negatively impacted buyer interactions.
With inputs from Amisha Arya
The put up Huge Tech Makes use of AI as an Excuse to Hearth Hundreds appeared first on Analytics India Journal.
