20 thousand job cuts in Meta, Microsoft raise concerns over AI labor crisis

More than 20,000 potential job cuts meta And Microsoft Revealed on Thursday after months Amazon has announced its most extensive layoffs yet, which may be just the beginning.

The same companies that are collectively spending hundreds of billions of dollars per year building artificial intelligence infrastructure to meet the growing demand for AI services are seeking efficiencies from AI by cutting headcount. They are still trying to get rights from pandemic-induced overhiring.

Many economists and industry experts fear that a labor crisis It could be upon us today – never in the future – given how rapidly AI is spreading across corporate America. As of this week, more than 92,000 tech workers have been laid off so far in 2026. layoff.fyiThe total since 2020 has reached nearly 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 AI. “We are seeing the beginning of a permanent change in the way work is organized and executed across industries.”

Jobs’ concerns are growing after OpenAI launched ChatGPT in late 2022, which shows the broader capabilities of chatbots powered by new AI models. Fears began to deepen in the workplace last year as Anthropic’s cloud tools began taking over entire business divisions and raising fears that a wide variety of existing software solutions could be at risk.

Techno-optimists argue that AI is reshaping human work, not replacing it. And like previous waves of large-scale industry disruption, new jobs will be created to match the needs of the changing economy. After all, mobile app developers didn’t exist in the days before smartphones. And what was the use of IT administrators before creating servers?

There appears to be a big gap between job loss and creation, at least in the AI ​​era. 2026 motion recruitment Study AI adoption has shown that hiring for entry-level and “generalized IT roles” is slowing, while AI positions are in high demand. The report says tech salaries will remain largely stagnant through 2025, except for a few specialized jobs like AI engineers.

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

“We are only beginning to understand how much of our daily work AI can take over across a variety of jobs,” Bhageria said.

Meta only hinted at AI in its announcement on Thursday. The company told employees in a memo that it plans to shed 10% of its workforce, or about 8,000 jobs, with the cuts starting May 20. “This is all part of our continued effort to run the company more efficiently and allow us to recoup other investments we are making,” the company told employees in a memo. According to the memorandum, the company is also canceling plans to fill 6,000 vacancies.

Almost as soon as the Meta news hit, Microsoft confirmed it would offer voluntary purchases, 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 spoke on condition of anonymity because the numbers are not being made public. With about 125,000 US employees, it could cut up to 8,750.

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

Nike announced a new round of layoffs on Thursday, affecting about 1,400 of the company’s employees, most of whom are concentrated in its technology division.

Job search site Glassdoor’s latest employee confidence index Showed the technical field Confidence saw the largest year-on-year decline of any industry, falling 6.8 percentage points to 47.2% in March from a year earlier.

Daniel Zhao, chief economist at Glassdoor, said that while fewer people are leaving their jobs out of fear of a volatile market, this dynamic comes at the expense of employee morale and career satisfaction. This means even more job cuts.

“Since natural erosion isn’t happening as much, companies are being more aggressive about pushing people out the door,” Zhao said. “Whether that means outright layoffs or raising standards for performance reviews, employers are taking a number of measures to cut workforce costs.”

snap Last month it said it would cut 16% of its workforce, or about 1,000 employees, and at least 300 open positions would be closed. CEO Evan Spiegel cited AI-powered capabilities in a letter to employees. sales force 4,000 customer support roles were eliminated in September, with CEO Marc Benioff saying, “I need fewer heads.”

Oracle It said in March it was laying off thousands of employees as it ramps up AI spending. The company’s core software business is facing market jitters over AI-related displacement. Meanwhile, the company is trying to compete with hyperscalers in the AI ​​infrastructure market and is facing pressure from investors over its declining cash flow as well as the amount of debt it is raising.

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

Amazon, the leader among tech companies, has cut at least 30,000 jobs since October, representing about 10% of its corporate and tech workforce. Amid announcements of mass layoffs, it has made smaller-scale layoffs across the company. Google has also made small but regular cuts through 2023.

But the expenditure continues.

Alphabet, Microsoft, Meta and Amazon are expected to spend a combined $700 billion this year to boost their AI infrastructure buildouts. All companies are scheduled to report quarterly results on Wednesday, and analysts can expect updated spending plans as well as questions about future layoffs.

In the startup world, the AI ​​boom is creating a very clear pattern: companies growing very fast with very few people. Venture capitalists say companies that aren’t operating with that ethos are having a hard time raising cash.

Zach Bratton-Glennon, partner at venture firm Gradiant, said it’s possible to wire up a functioning customer relationship management app in a day.

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

Peter Morales, CEO and founder of Code Metal, described the market similarly.

“Today, the pattern is that smaller teams are growing revenues faster than ever before,” he said.

At the largest companies in Silicon Valley, where the number of employees can easily reach 100,000, developers are well aware of this trend. They have access to the same vibe-coding tools as nearby startups and are seeing new products come to market at a faster pace.

The dramatic pace of change and disruption is creating understandable levels of job insecurity, Glassdoor’s Zhao said.

“This is an unusual tech boom in which people who are participating are very concerned about what’s happening,” Zhao said. “Many employees are feeling trapped right now.”

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

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