The tech industry’s layoff wave: How AI is changing the landscape
The first few weeks of 2026 have seen a continuation of the tech layoff wave that started in previous years. With over 123,941 tech employees fired from 269 companies in 2025, and 150,000 job cuts across 549 companies in 2024, the trend shows no signs of slowing down. One of the key factors behind these layoffs is the increasing adoption of Artificial Intelligence (AI) by major tech companies. AI-driven automation is transforming the way businesses operate, and many are using it to write code, automate routine tasks, and ultimately reduce their reliance on human labor.
The impact of AI on the labor market
While some experts believe that the impact of AI on the labor market will be muted, others argue that it will have a significant effect on the job market. A report by consulting firm Challenger, Gray & Christmas found that AI was behind layoffs that led to at least 55,000 people being fired in the United States in 2025. However, some experts, like Sander van’t Noordende, the CEO of Randstad, believe that the role of AI in job cuts is being overstated. Instead, they argue that the current uncertainty in the market is the main driver of layoffs.
Major tech companies and their layoff plans
Several major tech companies have announced significant layoffs in recent months. Amazon, for example, is planning to cut 30,000 corporate roles in a second round of job cuts. This would be the largest layoff in Amazon’s three-decade history, surpassing the 27,000 jobs cut in 2022. The company has directly linked the rise of AI to job cuts, saying that it’s enabling companies to innovate faster than ever before. However, Amazon CEO Andy Jassy has also suggested that the company’s bureaucracy is a major factor in the layoffs.
Meta’s Reality Labs division
Another major tech company, Meta, has also announced layoffs. The company plans to cut around 10% of the employees in its Reality Labs division, which works on products like the metaverse, virtual reality headsets, and augmented-reality glasses. This division has roughly 15,000 employees and has been a major focus area for Meta CEO Mark Zuckerberg. However, the metaverse project has burned over $60 billion since 2020, and the company is now looking to reduce its workforce.
Expert opinions on AI and layoffs
There is no consensus yet on how big a role AI will play in 2026’s tech layoffs. Kristalina Georgieva, managing director at the International Monetary Fund (IMF), believes that AI has the potential to boost economic growth by 0.8% over the next few years. However, she also warns that it’s hitting the labor market like a tsunami, and most countries and businesses are not prepared for it. Deutsche Bank analysts, on the other hand, believe that companies attributing job cuts to AI should be taken “with a grain of salt.” They argue that anxiety about AI will increase in 2026, leading to lawsuits and other issues.
Studies on the impact of AI on jobs
Studies on the impact of AI on jobs are not in agreement. A report by consultancy firm Mercer found that employee concerns about job loss due to AI have skyrocketed from 28% in 2024 to 40% in 2026. However, it also found that firms will need to upskill workers, as three-quarters of investors said they are more likely to invest in companies that provide AI education to employees. A Stanford study, on the other hand, reported a 16% relative decline in employment for graduates in roles exposed to AI, as opposed to jobs for experienced employees remaining stable since the launch of ChatGPT in November 2022.
Future implications and real-world consequences
The increasing adoption of AI by major tech companies has significant implications for the future of work. As AI continues to automate routine tasks and transform industries, it’s likely that we’ll see more layoffs and job displacement. However, it’s also important to note that AI has the potential to create new job opportunities and increase productivity. As experts like Georgieva suggest, it’s essential for countries and businesses to prepare for the impact of AI on the labor market by investing in education and upskilling workers. Ultimately, the key to navigating the challenges and opportunities presented by AI will be to strike a balance between technological innovation and human well-being.
