Workers enter ‘forever layoff’ era as firms cut jobs while hiring for AI
Major technology companies like Microsoft and Amazon are implementing recurring, smaller layoffs while simultaneously increasing investment and hiring in artificial intelligence. Companies maintain that these restructurings are for organizational efficiency rather than direct replacement of staff by AI.
Why it matters
The trend reflects a structural shift in the tech labor market where companies prioritize AI-driven growth over workforce stability, leading to a 'forever layoff' environment.
Microsoft's latest round of layoffs is part of a wider trend across the technology industry. Companies are increasingly making regular workforce cuts while continuing to hire for artificial intelligence (AI), invest billions in the technology and push for higher productivity.From Microsoft and Amazon to Meta, Cisco and Cloudflare, several major tech firms have announced layoffs in recent years despite remaining profitable. Instead of one large restructuring, many employees now face repeated rounds of smaller job cuts as companies adjust their businesses for the AI era.Microsoft began its new financial year by announcing that around 4,800 employees, about 2.1% of its global workforce, will lose their jobs. The cuts mainly affect the company's commercial sales business and Xbox gaming division. Before the layoffs, Microsoft employed more than 220,000 people worldwide.The company says the latest layoffs are not about replacing workers with AI.
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