More Than 165,000 Tech Jobs Cut This Year, With AI the Most-Cited Reason

Companies are announcing record revenues and large layoffs in the same quarter, naming AI as the cause of both. May was the worst single month for tech job cuts in years.

More than 165,000 jobs have been cut at technology companies in the first seven months of this year, and artificial intelligence is now the most commonly cited reason, according to the outplacement firm Challenger, Gray & Christmas. May was the heaviest single month for tech layoffs in several years.

The pattern that makes this different from previous rounds is the accompanying financial news. In earlier downturns, companies cut staff because business was bad. This year, many of the same companies are reporting record revenues and record profits in the quarters when they announce the cuts, and pointing to AI as the explanation for both — the engine of the growth and the reason fewer people are needed to produce it.

Some caution is warranted about the attribution. "AI" has become a convenient reason to give for a layoff that might have happened anyway: it sounds forward-looking rather than defensive, it pleases investors, and it avoids admitting overhiring. Economists studying this have generally found it difficult to separate genuine automation from cuts that would have occurred regardless and were labeled conveniently.

But the direction is no longer really in doubt, and the affected roles are the ones that were predicted: customer support, routine software work, junior analysis, content production. The entry-level positions Dario Amodei warned about a year ago — the jobs where a new graduate learns a profession by doing its simpler parts — are disproportionately represented.

Which raises the question nobody in the industry has answered. If the bottom rung of the ladder is the part that automates first, the pipeline that produces experienced workers stops filling. That problem does not show up in this year's numbers. It shows up in about a decade.