AI splurge is costing Big Tech its workforce

Tech companies are rushing to trade their people for more chips.

- Dan Gallagher & Asa Fitch

Layoffs might lift some efficiency measures, but there are other considerations.

Some of those companies might come to regret the exchange.Microsoft and Meta Platforms are just the latest major tech companies trying to scale back their workforces in the name of artificial intelligence. Meta’s latest plans will cut about 8,000 people from its workforce. Microsoft, meanwhile, is trying to trim its own head count with a “voluntary retirement program,” available to about 7% of its U.S. employees. That could lead to actual layoffs later if not enough take up the offer.

Oracle and Snap initiated major cuts in the past few weeks, while the financial-tech company Block, parent of Square and Cash App, announced in February a plan to cut 40% of its workforce, which amounts to more than 4,000 employees. Layoffs affecting 45,800 tech employees were announced last month, making March the worst month for reported tech-job reductions in at least two years, according to the tracking site Layoffs.fyi.

Companies are straining to portray the cuts as evidence that they are confident in an AI future in which more workers will be replaced by machines. They have been careful not to suggest any problems on the horizon. “We're not making this decision because we're in trouble,” Block Chief Executive Jack Dorsey wrote in his announcement.