Is Tech On It’s Way To 500,000 Layoffs?
AI is already gutting tech payrolls at Microsoft, Amazon, and Meta, but the real wave of job losses may be building in a sector most people have barely noticed yet.
Anthropic’s S-1 mentions AI could affect jobs in the technology, finance, law, and consulting sectors. Last year, CEO Dario Amodei said unemployment in the US could be affected enough that the national jobless rate might reach 20%
In the software sector, the early wave of that is already underway.
The early total is this: largely driven by advances in AI, Microsoft (NASDAQ: MSFT | MSFT Price Prediction) offered buyouts to 60,000 people. Much smaller, Oracle (NASDAQ: ORCL) cut 21,000 outright. And neither may be done as AI takes on more and more tasks performed at tech-driven US companies.
Amazon (NASDAQ: AMZN) has 1.6 million workers. The New York Times reported that the e-commerce and cloud company indicated it might not hire 600,000 workers it would have needed in the past by 2033. It has already cut 16,000 current workers. The headline read, “Amazon Plans to Replace More Than Half a Million Jobs With Robots.”
Mark Zuckerberg considered a cut of 60% of all Meta (NASDAQ: META) workers in August. He pulled back, and the cuts were smaller. If he goes ahead later, the cuts would hit 45,000.
Below the megatechs, Block cut 4,000 people. Intel’s cuts are nearly 14,000. IBM laid off people but didn’t release how many.
Just yesterday, Elon Musk said that 200 neocloud companies face guppy-level death. “As of the past few weeks, debt markets have almost entirely shut off access to money for any company that doesn’t have substantial revenue independent of AI data centers,” Musk posted on X. A review of companies like CoreWeave (NASDAQ: CRWV) and Revelio Labs shows they have about 2,500 each. So, a consolidation could push layoffs in this tier of companies to 300,000 to 400,000 jobs.
Goldman Sachs says AI will blitz the American workforce. About 9% of all workers will be “displaced.” Some of those people will not find future work. As AI takes over low-level coding, tech workers will have real trouble.
Anyone who thinks AI layoffs across the tech sector are over is a fool. In fact, as AI becomes more advanced, cuts become more likely. Zuckerberg’s original plan to cut staff may be the best indication of the future.
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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
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A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
