20k job cuts at Meta, Microsoft raise concern of AI labor crisis

More than 20,000 potential layoffs Meta And Microsoft It was announced on Thursday, months later Amazon He announced the most widespread layoffs ever, and this may be just the beginning.

The same companies that spend hundreds of billions of dollars annually to build AI infrastructure to meet the growing demand for AI services are seeking efficiencies from AI by reducing headcount. They’re also still trying to capitalize on overhiring fueled by the pandemic.

Many economists and industry experts fear this labor crisis Given how quickly AI is spreading across corporate America, it could happen to us today — but not in the future. As of this week, more than 92,000 tech workers have been laid off so far in 2026. layoffs.fyiTotal since 2020 reaches almost 900,000

“This represents a fundamental structural shift rather than a temporary market correction,” said Anthony Tuggle, an executive coach and leadership expert who previously worked in artificial intelligence. “We are witnessing the beginning of a permanent transformation in how work is organized and conducted across industries.”

Business anxiety has been growing since OpenAI launched ChatGPT in late 2022, demonstrating the extensive capabilities of chatbots powered by new AI models. Workplace fears began to intensify last year as Anthropic’s Claude tools began to take over entire business divisions, raising concerns that large swathes of existing software solutions could be compromised.

Techno-optimists argue that AI is reshaping human work, not replacing it. And just as in previous waves of mass industrial disruptions, new jobs will be created to meet the needs of a changing economy. After all, in the days before smartphones, there were no mobile app developers. So what did IT admins do before we built servers?

There appears to be a widening gap between job loss and job creation, at least in the age of AI. 2026 Action Recruitment to work It showed that AI adoption is slowing hiring for entry-level and “generalized IT roles,” while AI positions remain in high demand. Tech salaries remain largely flat from 2025, except for some specialized jobs such as artificial intelligence engineers, the report said.

Rajat Bhageria, CEO of physical AI startup Chef Robotics, said AI is likely to create jobs, but “it’s less certain right now what that will look like.”

“We are just starting to understand how much of our day-to-day tasks AI can handle for us across all different types of businesses,” Bhageria said.

Meta only pointed to artificial intelligence in its announcement on Thursday. The company said in a memo to employees that it plans to lay off 10% of its workforce, or about 8,000 people, with cuts starting May 20; “These are part of our ongoing efforts to manage the company more efficiently and allow us to balance other investments we have made.” The company is also canceling plans to fill 6,000 open positions, according to the statement.

Around the time the Meta news broke, Microsoft confirmed that it would make a voluntary buyout offer, a first for the 51-year-old software giant. About 7% of U.S. workers are eligible, according to a person familiar with the plans who asked not to be identified because the number is not publicly available. With about 125,000 U.S. employees, that could mean 8,750 layoffs.

Tech jobs aren’t just at risk in the tech industry.

Nike announced a new round of layoffs on Thursday, affecting about 1,400 employees across the company, mostly concentrated in the technology department.

Glassdoor’s new job search site Employee Confidence Index showed the technology sector It saw the largest annual decline in confidence among all sectors, falling 6.8 points to 47.2% in March compared to the previous year.

Fewer people are leaving their jobs out of fear of an unstable market, a dynamic that hurts employee morale and career satisfaction, said Daniel Zhao, Glassdoor’s chief economist. This also means more layoffs.

“Because natural attrition isn’t happening as much, companies are being more aggressive in pushing people out the door,” Zhao said. “Whether that’s outright layoffs or raising the bar for performance evaluations, there are a number of measures employers are taking to reduce labor costs.”

explode Last month it said it would lay off 16% of its workforce, or about 1,000 employees, and cut at least 300 open positions. CEO Evan Spiegel talked about AI-driven efficiencies in a letter to staff. sales force 4,000 customer support roles were laid off in September, with CEO Marc Benioff saying “I need fewer heads.”

Seer In March, it said it would lay off thousands of employees as it increased spending on artificial intelligence. The company’s core software business is exposed to market panic over AI-related displacement. Meanwhile, the company is trying to compete with hyperscalers in the AI ​​infrastructure market and faces pressure from investors over the amount of debt it has raised along with declining cash flow.

Eliminating 20,000 to 30,000 jobs could result in $8 billion to $10 billion in incremental free cash flow for Oracle, TD Cowen analysts wrote in a note in January.

Amazon, a leader among technology companies, has laid off at least 30,000 people since October; this represents approximately 10% of the corporate and technology workforce. Among the mass layoff announcements, there were continuous layoffs, albeit on a smaller scale, across the company. Google has also made small but regular outages since 2023.

But expenses continue.

Alphabet, Microsoft, Meta and Amazon are expected to spend approximately $700 billion to develop their artificial intelligence infrastructure this year. The companies are all scheduled to report quarterly results on Wednesday and can expect questions from analysts about updated spending plans and future layoffs.

The AI ​​boom in the startup world is creating a very clear pattern: companies are growing much faster with far fewer people. Venture capitalists say companies that don’t operate with this ethos have a much harder time raising cash.

Zach Bratun-Glennon, a partner at venture firm Gradient, said it’s possible to build a working customer relationship management application in a day.

“We are seeing companies that can generate $50 million in revenue with 50 employees, whereas it used to be a 250-person company for a software business,” he said. “Do I think there will be unicorns and decacorns with 50 or 100 employees? Absolutely. Can you start a public company with 200 employees? Absolutely.”

Peter Morales, CEO and founder of Code Metal, described the market in a similar way.

“Today, the pattern is for small teams to scale their revenue faster than ever before,” he said.

Developers at Silicon Valley’s largest companies, where employee numbers easily exceed 100,000, are well aware of this trend. They have access to the same vibration coding tools as nearby startups and are seeing new products come to market at a dizzying pace.

Glassdoor’s Zhao said the dramatic pace of change and disruption creates understandable levels of job insecurity.

“This is an unusual technological explosion in which the people involved feel quite anxious about what’s going on,” Zhao said. “Many workers feel stuck right now.”

— CNBC’s Annie Palmer, Jordan Novet, Lora Kolodny and Jonathan Vanian contributed to this report.

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