AI Revolution and Mass Layoffs: Why Tech Giants Are Letting Go of Employees

An unexpected and contradictory process is being observed in the global technology market: while large companies report record profits, they continue to lay off thousands of employees. The implementation of artificial intelligence (AI) technologies is cited as the primary reason for these mass layoffs. According to industry experts, 2026 will serve as a turning point for the transformation of technological jobs. This is reported by Techcrunch.com news provides.

According to a recently announced financial report from Oracle, the company has reduced its workforce by 21,000 people, or 13 percent of its total staff, over the last 12 months. Company management explained this decision as a direct result of implementing AI technologies into operational processes. This figure is significantly higher than previous forecasts, indicating that algorithms are replacing human labor in the tech world.

Companies losing jobs due to AI

According to data from the consulting firm Challenger, Gray & Christmas, May recorded the highest level of layoffs in the technology sector in recent years. The list includes not only software developers but also hardware and cybersecurity giants:

• Meta: The company led by Mark Zuckerberg laid off 8,000 employees, but transitioned 7,000 people into new AI-focused roles.
• Google: Nearly 3,000 engineers were laid off in the Cloud and cybersecurity divisions of Alphabet, even though Cloud revenue exceeded 20 billion dollars for the first time.
• Cisco: The company announced the reduction of nearly 4,000 jobs, redirecting resources toward fiber optics and AI infrastructure.
• Intuit: The financial software developer parted ways with 3,000 employees to simplify its structure.

GitLab was not exempt from this trend. The company decided to lay off 14 percent of its employees (approximately 350 people) to invest in AI infrastructure. According to GitLab CEO Bill Staples, the company has begun a "generational shift" process and is completely rebuilding its platform for AI agents. Interestingly, the company's revenue grew by 23 percent compared to last year.

Changes in Industry and Management

Not only IT companies but also traditional industry representatives are feeling the impact of AI. For example, General Motors (GM) laid off nearly 600 employees from its information technology department. Although the company attributed this to market conditions, internal sources confirm that AI played a significant role in the decision. At the same time, GM is actively seeking new specialists in AI and autonomous vehicles.

Cloudflare, despite recording its highest quarterly revenue ever (639.8 million dollars), let go of 20 percent of its employees. Company head Matthew Prince noted that the layoffs primarily affected middle managers, lawyers, and finance department staff. This shows that AI has begun to replace not only coders but also administrative management staff.

Experts believe that tech giants are now using AI to optimize the over-hiring policies of the pandemic era. This process is leading to a sharp change in skill requirements in the labor market and the necessity for traditional professionals to adapt to new technologies. For Uzbek specialists, this global trend is an important signal: the ability to work with AI tools is now becoming a necessity rather than an advantage.