20k job cuts at Meta, Microsoft raises concerns over AI workforce crisis

More than 20,000 possible job cuts Meta again Microsoft revealed on Thursday, months later Amazon announced its most widespread layoffs, it may be the beginning.

The same companies that are spending hundreds of billions of dollars a year building intelligence infrastructure to meet the growing demand for AI services are looking to become more efficient in AI by reducing the number of heads. And they’re still trying to scale up from pandemic-induced hiring.

Many economists and industry experts fear that a labor crisis may be upon us today — not in the future — given how quickly AI is sweeping corporate America. As of this week, more than 92,000 tech workers have been laid off so far in 2026, according to Layoffs.fyi, bringing the total to nearly 900,000 by 2020.

“This represents a significant structural change rather than a temporary market correction,” said Anthony Tuggle, a management coach and leadership expert who has worked in AI. “We are witnessing the beginning of lasting changes in the way work is planned and carried out across industries.”

Concerns about the service have been growing since OpenAI launched ChatGPT in late 2022, demonstrating the scalable capabilities of chatbots powered by new AI models. Fears in the workplace began to rise last year as Claude’s Anthropic tools began to work on enterprise-wide fragmentation and raised the idea that existing software solutions could be vulnerable.

Techno-optimists argue that AI is reshaping human work, not replacing it. And as in previous periods of industrial disruption, new jobs will be created to meet the needs of a changing economy. Mobile app developers, in fact, did not exist in the days before smartphones. And what did IT administrators use before we created servers?

At least there seems to be a growing gap between job losses and creation in the AI ​​era. The 2026 Motion Recruitment study showed AI adoption is reducing hiring for entry-level and “general IT roles,” while AI positions are in high demand. Tech salaries remain low through 2025 except for some specialized jobs like AI engineering, the report said.

Rajat Bhageria, CEO of AI startup Chef Robotics, said that while AI may create jobs, “we’re not sure what that will look like right now.”

“We’re starting to understand how much of our daily work AI can cover for us in all kinds of jobs,” Bhageria said.

Meta only revealed AI in its announcement on Thursday. The company told employees in a memo that it plans to lay off 10% of its workforce, the equivalent of about 8,000 jobs, with the reductions beginning on May 20, “all part of our ongoing effort to run the company more efficiently and to allow us to reduce other investments we’re making.” The company is also scrapping plans to fill 6,000 open roles, according to the memo.

When the Meta news broke, Microsoft confirmed it would offer a voluntary buyout, a first for the 51-year-old software giant. About 7% of US workers are not eligible, according to a person familiar with the plans who asked not to be identified because the number is not made public. With about 125,000 US workers, that would add up to 8,750 cuts.

Tech jobs are not only at risk in the tech industry.

Nike announced a new round of layoffs Thursday affecting about 1,400 employees across the company, most of them focused on the technology department.

“This reduction is very difficult for the teammates who are directly affected and the teams close to them,” Chief Operating Officer Venkatesh Alagirisamy told the employees.

Job search site Glassdoor’s latest Employee Confidence Index showed the technology sector saw the largest year-over-year decline in confidence of any industry, falling 6.8 percent in March from a year earlier to 47.2 percent.

Daniel Zhao, Glassdoor’s chief economist, said fewer people are leaving their jobs, fearing an unstable, volatile market that has a cost on employee morale and job satisfaction. It also means more job cuts.

“Because natural decline is less likely, companies are more aggressive about getting people out the door,” Zhao said. “Whether that means outright layoffs or raising the level of job reviews, there are many steps employers are taking to reduce labor costs.”

Snap said last month that it would cut 16% of its workforce, or about 1,300 employees, and that at least 300 open positions would be closed. CEO Evan Spiegel highlighted AI-driven efficiencies in a letter to employees. Salesforce quit 4,000 customer support roles in September, when chief executive Marc Benioff said, “I need less heads.”

The Oracle said in March it was laying off thousands of workers as it ramps up its use of AI. The company’s core software business is on the receiving end of market panic about AI-related migration. Meanwhile, the company is trying to compete with hyperscalers in the AI ​​infrastructure market and has been facing pressure from investors over its increasing debt ratio, as well as its dwindling cash flow.

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

Leading the pack among tech companies, Amazon has cut at least 30,000 jobs since October, representing about 10 percent of its corporate and technology workforce. Among the announcements of mass layoffs, it has made layoffs company-wide, albeit on a smaller scale. Google is also making small but general cuts starting in 2023.

But spending continues.

Alphabet, Microsoft, Meta and Amazon are expected to spend a combined $700 billion this year to further build AI infrastructure. The companies are all scheduled to report quarterly results on Wednesday, and can expect questions from analysts about revised spending plans and future layoffs.

In the first world, the AI ​​boom creates a very clear pattern: companies grow very fast with very few people. Venture capitalists say companies that don’t operate with those ethics have a much harder time raising money.

Zach Bratun-Glennon, a partner at business firm Gradient, said it’s possible to plug in an effective customer relationship management app in a day.

“We’re seeing companies that reach $50 million in revenue with like 50 employees, whereas that used to be a company with 250 people in the software business,” he said. “Do I think there will be 50 or 100-person unicorns and decacorns? Sure. 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 small groups raising money faster than ever,” he said.

At the big companies in Silicon Valley, where the headcount can easily top 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 hit the market at a dizzying pace.

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

“This is a rare technological breakthrough where the people involved feel very concerned about what’s going on,” Zhao said. “A lot of workers feel stuck right now.”

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

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