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Meta and Microsoft have disclosed plans to cut more than 20,000 jobs, months after Amazon carried out what was described as the largest layoff in history. The moves are being framed as part of a broader shift in how major technology firms manage labor costs, even as they spend heavily on AI infrastructure.
Economists and industry experts warn that a labor market crisis is no longer a distant possibility but is already visible. Layoffs.fyi data cited in the report show more than 92,000 tech employees laid off in 2026 alone, bringing total layoffs since 2020 to nearly 900,000.
Anthony Tuggle, a leadership expert with AI experience, said the changes represent a “fundamental structural change, not just a temporary market adjustment,” adding that the start of a permanent transformation in how work is organized is underway.
Concerns about employment began to surface in late 2022 after the launch of ChatGPT and intensified last year as tools such as Anthropic’s Claude improved. The report says these capabilities can replace the work of entire teams, raising fears for roles once viewed as secure in software.
Some workers and observers argue AI is reshaping rather than eliminating jobs, with new roles likely to emerge over time. However, the report notes that 2026 is showing a gap between jobs lost and new roles created. Motion Recruitment’s research indicates AI is suppressing hiring for internships and general IT positions, while demand remains high for AI specialists. It also says that, aside from highly specialized AI engineers, the tech wage floor has remained relatively flat.
The report says a different pattern is emerging in the startup world: faster-growing companies with far fewer employees. Zach Bratun-Glennon of Gradient said companies are generating $50 million in revenue with only 50 employees, whereas a software company at that scale previously would have required about 250 people.
He also asked whether a public company could be built with just 200 employees, concluding that it is “entirely possible.”
In large Silicon Valley firms—where headcounts can exceed 100,000—developers are described as feeling the pressure. The report says workers have access to AI tools that can speed up product launches, while also increasing the risk that their roles are reduced.
Daniel Zhao, chief economist at Glassdoor, said confidence among tech workers has fallen the most of any sector. He noted that people are reluctant to switch jobs due to concerns about market instability, contributing to a stagnant environment.
Zhao added: “Because employees don’t leave voluntarily, firms are becoming more aggressive in pushing them out. Whether through direct layoffs or higher performance standards, business leaders are doing everything to cut labor costs.”
Source: CNBC, Business Insider
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