Big Tech's 'AI Excuse': Layoffs Soar As Automation Takes The Blame
Whether AI is the reason or the rationale, the results are clear: the tech world is changing rapidly, and tens of thousands of workers are being caught in the crossfire.
As the tech industry rides the AI wave, another trend has emerged just as forcefully — massive layoffs. In the first half of 2025 alone, over 50,000 tech jobs have been slashed, according to Layoffs.fyi data cited by Analytics India Magazine (AIM). And increasingly, companies are pointing to artificial intelligence — not just as a disruptor, but as a justification.
Microsoft’s AI Bet Hits Human Cost
Microsoft is letting go of about 6,000 employees — roughly 3 per cent of its global workforce. A WARN notice filed in Washington revealed that nearly 2,000 of those cuts will hit the company's home state, including 475 remote workers. Among the impacted is a longtime developer who significantly boosted TypeScript's performance.
“After 18 years at Microsoft, with roughly a decade of that time working on TypeScript, I have unfortunately been let go in the latest round of layoffs. I need to take a few days to process before I start looking for work,” the developer wrote on X.
Microsoft didn’t respond to AIM’s request for comment. But critics and observers suggest the layoffs may be less about AI replacing humans, and more about funding the tools of the future.
“This isn’t about AI replacing humans yet — it’s about restructuring to fund AI initiatives. Microsoft plans to spend $80 billion on AI this fiscal year,” noted Wes Roth on X. He warned that if such spending patterns continue, the industry might see over 10,000 annual job cuts.
Automation’s Double-Edged Sword
Other industry voices point to a broader shift in capital allocation. Deedy Das of Menlo Ventures said that the cost of building generative AI infrastructure — especially chips — is forcing companies to reconsider expansion and hiring. AI’s growing role in code development is also a factor. Microsoft CEO Satya Nadella acknowledged that “20-30 per cent of the code that is inside of our repos today and some of our projects are probably all written by software.”
That shift is spurring existential questions across the tech world. “Is this the new normal?” Das asked, wondering aloud if Microsoft truly needs 400,000 employees to achieve twice the output it once managed with half that number.
The answer may be evolving, but it’s clear that Big Tech is trimming fat while pouring billions into AI. Google has slashed jobs in multiple departments, including 200 roles in its global business organisation and hundreds more in its Platforms and Devices team. Meta cut 3,600 employees — roughly 5 per cent of its workforce — as part of performance-based restructuring. Both firms are also investing tens of billions into AI infrastructure in 2025.
Beyond the Buzzwords: Real Workers, Real Consequences
At PwC, 1,500 employees in the US were let go as part of post-pandemic adjustments and a push toward automation. The process, however, left many workers disillusioned.
“It’s pathetic on their part. While hiring, they take four rounds of interviews and weeks to onboard, but when it comes to firing, a single call lasting just a few minutes was enough to deliver the news,” said a former employee to AIM.
IBM has replaced 200 HR roles with AI but claims it has reinvested those savings into new hires. “Our total employment has actually gone up, because what [AI] does is it gives you more investment to put into other areas,” said CEO Arvind Krishna. His HR chief, Nickle LaMoreaux, added, “Very few roles will be completely replaced,” noting that AI would mostly take over routine work.
Even in education tech, AI is shifting the ground. Chegg is laying off 248 workers — about 22 per cent of its workforce — as students pivot from traditional tools to AI platforms like ChatGPT. Duolingo, too, is replacing human contractors with AI while massively expanding its language offerings, crediting artificial intelligence for the scale-up.
Is AI the Scapegoat — or the Strategy?
The reality may not be black and white. While companies like Chegg and CrowdStrike are clearly automating once-human tasks, industry insiders argue that AI is being used as a shield for deeper, more strategic layoffs. In some cases, the promise of AI seems to have outpaced its actual ability to fully replace human workers.
Klarna’s CEO Sebastian Siemiatkowski recently admitted that the company, after shifting customer service to AI, is now reintroducing human agents — acknowledging the shortcomings of relying solely on automation.
Whether AI is the reason or the rationale, the results are clear: the tech world is changing rapidly, and tens of thousands of workers are being caught in the crossfire.
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