Key conclusions
- American technology corporations have eliminated almost 140,000 jobs since the beginning of the year, pointing to the development and implementation of artificial intelligence as a direct reason for restructuring.
- In the group including Amazon, Oracle, Meta and Microsoft alone, nearly 50,000 people have lost their jobs, while these companies spend hundreds of billions of dollars on building computing infrastructure.
- Wall Street reacts with reserve to the official narrative of management boards – companies explaining the reductions with new technology record worse stock market results than the Nasdaq index.
The American Big Tech sector is undergoing the largest wave of restructuring in years. Since the beginning of the year, almost 140,000 jobs have disappeared from the global market, and the management boards of the largest corporations directly point to automation and the development of solutions based on language models as the key factor forcing the cuts. According to the findings of the Financial Times, four entities – Amazon, Oracle, Meta and Microsoft – are responsible for eliminating nearly 50,000 jobs. The funds saved on salaries go directly to the expansion of new data centers.
The modification of the employment structure affects market leaders.
Budget transfers and new work structure
Technology industry leaders are implementing a strategy to reorganize operating costs. In a report to the US Securities and Exchange Commission, Monday.com announced a plan to reduce 20% of its staff, which means laying off over 600 people. The Israeli entity explains this step by transforming its business model towards algorithmic solutions, despite the forecasted increase in revenues by 20%.
The scale of the phenomenon is visible in the moves of Microsoft, which eliminated 4,800 jobs, mainly hitting the structures responsible for the Xbox gaming sector and sales departments, and additionally offering optional severance pay as part of voluntary departures. In turn, Oracle reduced its global workforce by as many as 21,000 positions in 12 months. The company admitted in financial documents that the implementation of new tools generates decreases in the demand for human labor.
Reconstruction of resources takes various forms.
Meta reduced approximately 8,000 jobs while shifting 7,000 employees to new computing technology projects. Google is conducting continuous layoffs in the Cloud division and in the cybersecurity unit. The layoffs there affected more than a third of lower-level managers, and estimates indicate that 1,500 to more than 3,000 engineers lost their jobs.
GitLab is also rebuilding its infrastructure, having laid off 350 people (14% of the staff) and withdrawing from 22 countries. Amazon is operating on a large scale, eliminating 16,000 corporate positions in January, which, when combined with earlier stages, gives a total of 30,000 positions eliminated.
Changing the profile of the job sought in corporations
The pressure to increase performance is changing expectations for teams. Reducing the complexity of structures and eliminating intermediate levels of management have become the rule.
Intuit decided to eliminate 3,000 positions (17% of the workforce) while simplifying its operational structure. Cloudflare laid off 1,100 employees, mainly eliminating management, legal, finance and internal audit departments. The changes also affected the automotive sector – General Motors eliminated 500 to 600 IT positions in Austin and Warren.
The financial industry has undergone corrections. The Coinbase exchange said goodbye to 700 people (14% of the staff), switching to a model of one-person operating teams supported by software. PayPal has planned to eliminate over 4,500 jobs (approximately 20% of the staff) within three years, focusing on the automation of customer service and risk analysis. Snap reduced 16% of its team, eliminating 1,000 positions and closing more than 300 open hires.
The layoffs covered software developers and hardware manufacturers. Block eliminated 4,000 positions, reducing employment by almost half. Salesforce eliminated a total of approximately 5,000 technical support roles due to the implementation of autonomous digital agents. Atlassian dismissed 1,600 people (10% of the staff), shifting its forces to corporate sales. Dell saw its workforce decline by 11,000 employees, with severance costs of $569 million. IBM has eliminated between 3,000 and 9,000 positions in the U.S., including replacing 200 HR positions with digital agents.
Stock exchange verification of the official narrative
Investors view mass layoffs with caution. An analysis of financial results conducted by the Financial Times showed that the shares of companies explaining the layoffs by the implementation of modern tools performed worse than the Nasdaq index by almost 10% within 30 days of the publication of the announcements. Analysts indicate that some of the reductions are the result of a previous overestimation of the need for staff, and not just a real increase in efficiency.
Some of the laid-off engineers find employment with entities that build basic models, such as Anthropic or OpenAI, which conduct recruitment. At the same time, companies such as IBM declare an increase in employment in entry-level positions in cloud departments, eliminating positions in traditional operations.
