Is artificial intelligence replacing tech workers or providing an excuse for job cuts?

Meta, Coinbase and Block have each laid off at least 10 percent of their staff in recent months, partly blaming artificial intelligence. About 13,000 jobs were cut between the three companies.

But the cuts also came after big changes and growing questions about their business. Meta backed away from its big bet on the so-called metaverse, which cost the company roughly $80 billion. Brian Armstrong, CEO of Coinbase, he said that its business has remained volatile and that there has been a “market crash” in cryptocurrencies. And Block’s top executive, Jack Dorsey, acknowledged that the company has grown too much during the pandemic, tripling its workforce between 2019 and 2022.

Layoffs in the tech industry are accelerating, regardless of executive motivation. So far this year, more than 150 tech companies have laid off a total of at least 115,000 workers, according to Layoffs.fyi, which tracks layoffs in the industry.

This drop in layoffs has become a steady stream in recent weeks. Companies cutting their teams run the gamut from software providers like Atlassian and Autodesk to social networking apps like Pinterest and LinkedIn to financial technology companies like Intuit and PayPal.

But in more than a few cases, recent layoffs have coincided with other business problems. Wall Street is loving the AI ​​story right now. That, analysts and economists say, has offered a smokescreen for companies looking to boost profits or fix old mistakes.

Cutting jobs to make room for AI is “a nice excuse, but some of them aren’t necessarily the best and best-run companies,” said Mark Mahaney, an analyst at investment bank Evercore. “Maybe they’ve taken over or they’re losing market share. There could be other issues.”

For example, when Snap CEO Evan Spiegel laid off 1,000 people in April, he said the company needed to turn a profit, which it did in just three quarters since going public in 2017. But he also said that AI is improving efficiency at the company, with “small teams using AI tools to make meaningful progress on several important initiatives.”

Meta’s turn towards AI was timed with a big shift away from her giant metaverse project. During the pandemic, the company hired thousands of people to work on efforts to saying it would add 10,000 employees in the European Union. From 2019 to 2022, Meta doubled to around 87,000 employees.

Since then, Meta has been steadily retreating from its augmented and virtual reality unit as it invests money in AI. Last month, Meta laid off 8,000 people, or 10 percent of its workforce, even as its most recent quarterly profit was nearly $27 billion.

“All these cuts are going on and there are record profits,” said Ava Sazanami, who worked for Meta from 2022 to 2025. AI “doesn’t really cost any less money,” she added. “It’s somewhat of an apology.

Last month, Meta also redeployed 7,000 employees to work on AI tools and applications. The company is pushing its workers to embrace AI, factoring their use of the technology into performance reviews and monitoring employees’ computers to gather training data for its own AI.

“We’re seeing more and more examples of one or two people building something in a week that used to take dozens of people months,” Mark Zuckerberg, Meta’s CEO, said during an April call with investors.

Meta said its firings, reassignments and other personnel changes vary by team. Coinbase and Snap declined to comment. Block did not respond to requests for comment.

Many other companies have said they are cutting jobs to help free up money for AI projects. Intuit last month laid off about 3,000 people to devote more resources to its “big bets,” including expanding its “native artificial intelligence platform,” said Sasan Goodarzi, its chief executive. in a message to employees.

Cisco CEO Chuck Robbins he said the company would invest “in the use of AI by our employees across the company” as it laid off 4,000 employees last month. And Microsoft in April offered early retirement to about 7 percent of its workforce in the United States, or thousands of people, as it planned to spend about $190 billion this year on capital expenditures such as data centers.

Perhaps the most direct explanation for the job cuts came from Cloudflare’s CEO, Matthew Prince. When a company that provides various Internet services laid off 1100 people last month, he said in a message to employees that the cuts were not “at the cost of cutting costs or evaluating the performance of individuals.”

Mr Prince said his company was restructuring for the “era of agentic artificial intelligence”, referring to digital assistants that can do tasks on their own. In an opinion essay in The Wall Street Journal, he said the technology would replace workers he called “meters” — people with jobs in industries such as internal audit, compliance, finance, marketing and operations — and middle managers.

Intuit, Cisco, Microsoft and Cloudflare declined to comment.

The rest of the economy has yet to see large-scale layoffs due to artificial intelligence, said Daniel Keum, associate professor of management at Columbia Business School.

“There are certain segments of the labor market where we’re starting to see a real impact,” such as “technology-intensive industries for juniors and new graduates,” Mr. Keum said. “If you’re a junior who graduated in the last two years — or worse, if you graduated this year — recruiting is down.”

But relief for tech workers doesn’t seem to be on the horizon. Andy Jassy, ​​CEO of Amazon, he said Last year, the company expected to operate with fewer employees in the coming years “as we gain greater efficiency through the widespread use of artificial intelligence across the company.” Amazon laid off 14,000 corporate employees in October and another 16,000 in January, saying the cuts were to reduce red tape.

For college graduates with computer science degrees just entering the workforce, getting a job can be a challenge. In addition to the layoffs, Meta said it would close 6,000 positions it had planned to fill. Snap said it will close 300 open roles. Although AI companies are still hiring, the technology has led some startups to hire far fewer people.

“AI is now causing this isolated recession for college graduates,” Mr. Keum said. “Will it slow down? My answer is no. It will speed up.”

Natalie Rocha reported from San Francisco.