AI Wave Triggers Tech Layoffs, 100,000 Jobs Are at Risk

Investing

Published: July 2, 2025 10:49 am

Key Points

Major tech companies including Microsoft (NASDAQ: MSFT), Meta (NASDAQ: META), and Intel (NASDAQ: INTC) have collectively laid off tens of thousands of employees, increasingly citing AI automation as a driver.
AI is replacing lower-level coding roles, enabling significant cost reductions and driving improved margins, particularly for firms with large software development teams.
This trend is likely to accelerate as AI capabilities advance, positioning labor efficiency gains as a key profitability lever for mega-cap tech stocks.
Are you ahead, or behind on retirement? SmartAsset’s free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don’t waste another minute; get started by clicking here.(Sponsor)

Watch the Video

Transcript:

[00:00:04] Doug McIntyre: Lee, one of the things that’s happened just in the last few months is I’m starting to see real layoffs real among the mega tech guys.

[00:00:13] Doug McIntyre: I think Microsoft has announced two and then the, Wall Street Journal said they sort of did a stealth one too. Yep. And they, people are beginning to admit, the chairman of IBM (NYSE: IBM) said this three weeks ago, that AI is now affecting their ability to do coding, particularly what I would describe as lower level coding.

[00:00:33] Doug McIntyre: Yep. And who does more coding than a big tech company? I not sure. Nobody. A railroad company or somebody. Yeah. So I’m looking for lots of layoffs at these companies with AI replacements and to me that’s a margin play as an investor. Well, yeah. I mean, that are replaceable. That’s a margin play to me.

[00:00:55] Lee Jackson: Well, I have your numbers here.

[00:00:57] Lee Jackson: Microsoft, which has been doing extremely good, that laid off 6,500 people. That’s a fair amount of people. I know they have a, a ton of employees, but Meta Platforms, the stock that has exploded higher over the last two years, they laid off 5% of their workforce, and that’s 3,600 people. And of course, I know your favorite company that, is a, loss leader in the intel chip business.

[00:01:23] Lee Jackson: Intel laid off 21,000 people. And, surveys are indicating, and th this is that there will be over a hundred thousand layoffs just in the tech sector, when it’s all added up. Just over the last year or

[00:01:41] Doug McIntyre: so, listen, the worst run tech company in the universe, IBM, has done some layoffs. They say because of ai Yeah.

[00:01:49] Doug McIntyre: And they said there are more coming sell. Yep. When guys who literally, Can’t find the front door with a, their hands in a flashlight at IBM even. They’re smart enough to start. I know, So the

[00:02:03] Lee Jackson: thing is, I, this is only gonna increase. And like you said,it’s expensive to get rid of people, but only on a one time basis, and once they’re out the door and once they’re severance or whatever’s been paid, then you know, you’re home free.

[00:02:18] Doug McIntyre: I see this as a big margin play on big tech companies. Yeah. I really do. Being able to replace people, I don’t know where else it’s gonna work, but it’s working in tech

[00:02:28] Lee Jackson: Well and exponentially it’s gonna go higher. ’cause AI’s gonna get grow more.

[00:02:33] Doug McIntyre: Yeah.

[00:02:34] Lee Jackson: So if you’re, an entry-level tech guy, consider a job in welding Yes.

[00:02:38] Lee Jackson: To say goodbye. Yeah.I wouldn’t wanna be some engineer coming out now hoping for a, $200,000 a year job at. Big tech. I don’t know if it’s gonna be there forever.

[00:02:49] Doug McIntyre: Ain’t gonna happen.

Get Ready To Retire ^(Sponsored)

Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.

Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.

Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future

Click here to get started!