SAN FRANCISCO: Meta, Coinbase and Block have each laid off at least 10% of their employees in recent months and partly blamed artificial intelligence. About 13,000 jobs were eliminated among the three companies.
But the cuts also came after big changes and growing questions about their businesses. Meta backed away from its big bet on the so-called metaverse, which cost the company about US$80bil (RM321bil). Coinbase’s CEO, Brian Armstrong, said its business remained volatile and there was “a down market” for cryptocurrency. And Block’s top executive, Jack Dorsey, acknowledged that the company had grown too much during the pandemic, tripling its workforce from 2019 to 2022.
Layoffs in the tech industry are accelerating, whatever the motivations of executives. So far this year, more than 150 technology companies have cut a total of at least 115,000 employees, according to Layoffs.fyi, which tracks job cuts in the industry.
That drip-drip of layoffs has become a steady stream in recent weeks. Companies slashing their staffs have run the gamut from software providers Atlassian and Autodesk, to social networking apps Pinterest and LinkedIn, to financial technology companies Intuit and PayPal.
But in more than a few cases, the recent layoffs have coincided with other business issues. Wall Street loves an AI story right now. That, analysts and economists say, has offered a smoke screen for companies looking to beef up profits or patch over old mistakes.
Cutting jobs to make way for AI is “a nice excuse, but some of these aren’t necessarily the best, most well-run companies,” said Mark Mahaney, an analyst at investment bank Evercore. “They may have overhired, or they may be losing market share. There may be other issues.”
When Snap’s CEO, Evan Spiegel, laid off 1,000 people in April, for example, he said the company needed to turn a profit, which it has done in only three quarters since going public in 2017. But he also said AI was improving efficiency at the company, with “small squads leveraging AI tools to drive meaningful progress across several important initiatives.”
Meta’s turn toward AI was timed with a big shift away from its giant metaverse project. During the pandemic, the company hired thousands of people to work on the effort, saying it would add 10,000 employees in the European Union. From 2019 to 2022, Meta doubled in size to about 87,000 employees.
Since then, Meta has steadily trimmed from its augmented and virtual reality unit as it has funnelled money into AI. In April, Meta said it would spend US$125bil (RM501bil) to US$145bil (RM582bil) this year on capital expenditures like data centres, more than double its spending last year. Last month, Meta laid off 8,000 people, or 10% of its workforce, even though its most recent quarterly profit was nearly US$27bil (RM108bil).
“All these cuts are happening, and there are record profits,” said Ava Sazanami, who worked for Meta from 2022 to 2025. AI “is actually not costing any less money,” she added. “It is an excuse to some extent.”
Last month, Meta also reassigned 7,000 employees to work on AI tools and apps. The company has been pushing its workers to adopt AI, factoring their use of the technology into performance reviews and tracking employees’ computers to gather training data for its own AI.
“We’re seeing more and more examples where one or two people are building something in a week that would have previously taken dozens of people months,” Mark Zuckerberg, Meta’s CEO, said during a call with investors in April.
Meta said its layoffs, reassignments and other personnel changes varied 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 laid off about 3,000 people last month so it could devote more resources to its “big bets,” including expanding its “AI-native platform,” Sasan Goodarzi, its CEO, said in a memo to employees.
Cisco’s CEO, Chuck Robbins, said the company would invest “in our employees’ use of AI across the company” as it cut 4,000 employees last month. And Microsoft offered early retirement in April to roughly 7% of its employees in the United States, or thousands of people, as it planned to spend about US$190bil (RM762bil) this year on capital expenditures like data centres.
Perhaps the most blunt explanation for job cuts has come from Cloudflare’s CEO, Matthew Prince. When the company, which provides various internet services, laid off 1,100 people last month, he said in a memo to employees that the cuts were “not a cost-cutting exercise or an assessment of individuals’ performance.”
Prince said his company was restructuring for “the agentic AI era,” referring to digital assistants that can do tasks by themselves. In an opinion essay in The Wall Street Journal, he said the technology would replace workers he called “measurers” – people with jobs in sectors 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 not yet seen sweeping job cuts because of AI, said Daniel Keum, an associate professor of management at Columbia Business School.
“There are certain segments of the labour market where we’re starting to see real impact,” like “tech-concentrated sectors for juniors and new graduates,” Keum said. “If you’re a junior who graduated in the past two years – or, even worse, if you graduated this year – then hiring is getting cut.”
But relief for tech workers doesn’t appear to be on the horizon. Andy Jassy, Amazon’s CEO, said last year the company expected to operate with fewer corporate employees in the coming years “as we get efficiency gains from using AI extensively across the company.” Amazon laid off 14,000 corporate employees in October and 16,000 more in January, saying those cuts were to reduce bureaucracy.
For college graduates with computer science degrees just entering the workforce, getting a job could be a struggle. In addition to the layoffs, Meta said it would close 6,000 roles it had planned to fill. Snap said it would close 300 open roles. Although AI companies are still hiring, the technology has led some startups to hire many fewer people.
“AI is causing this isolated recession for college graduates now,” Keum said. “Is that going to slow down? My answer is no. It’s going to accelerate.” – ©2026 The New York Times Company
This article originally appeared in The New York Times.
