Tech Companies Layoffs: Major software companies like Meta and Microsoft have recently announced major cuts in their global workforce, while on the other hand, these companies are also investing heavily in the field of Artificial Intelligence (AI). Acknowledging the connection, Janelle Gale, Meta’s chief human resources officer, said about 10 percent of the workforce, or about 8,000 employees, were being laid off to “compensate for other investments.” Meta chief Mark Zuckerberg has already talked about plans to accelerate AI in a big way and spend more than US$115 billion this year.
Microsoft is offering VRS
Similarly, Microsoft is also betting big on AI and has announced a voluntary retirement package (VRS) for about 7 percent of its US workforce. Apart from these two giants, Atlassian, Block, WiseTech Global and Oracle have also taken similar steps this year, in which AI was mentioned but not directly attributed to it. There is a strong debate on what is the real reason behind these layoffs.
Discussion is taking place on three viewpoints
This is being understood mainly from three perspectives. The first view is that AI is an emerging ‘superintelligence’ that may be superior to humans in most intellectual tasks in the future. According to this view, these layoffs are not just corporate restructuring, but the beginning of a larger change. However, experts believe that this claim is still too high, as most professional work is complex and ambiguous.
The second view considers AI as ‘hype’. Sam Altman, head of OpenAI, calls this “AI washing”—that is, companies attributing layoffs to AI that they otherwise would have done. For example, Meta announced in March that it would shut down its metaverse platform Horizon World by June. Reality Labs, the organization developing this technology, employed 15,000 people by January 2026. Which indicates that some decisions may be linked to earlier strategies.
A third, more balanced view recognizes that AI is a powerful tool, but to take full advantage of it, companies need to change the way they work. Changes in the number and roles of employees are natural in this process. Companies are putting pressure on employees to be more productive amid uncertainty, so that they learn to use AI better. Industry experiences also indicate in this direction. For example, according to Sundar Pichai, AI adoption has increased a company’s engineering speed by about 10 percent, which can correspond to a 7-10 percent reduction in workforce.
What do experts believe?
Experts believe that the software development sector is an early indicator of changes in broader ‘knowledge work’. It is possible for AI to increase productivity, but its impact is not the same across sectors. In this scenario, understanding AI and using it properly is becoming an essential professional skill. In the coming years it will become clear how effective AI really is. AI will prove useful if companies recruit employees with new skills and improve operations. Otherwise, it will remain merely a means of saving costs. Experts say that to understand the direction of tech companies, it is more important to see in which areas they are hiring, and not just which positions they are cutting.
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SK Sharma is a content writer who writes on news, entertainment, and lifestyle topics. She has over four years of experience and is known for conveying information in simple and clear language.
