Generative AI is being touted as a major focus for growth across the tech industry, but many companies are also using it as a scapegoat as they attempt to justify huge swaths of layoffs. Reportedly, nearly 55,000 layoffs in the United States were due to AI in 2025, despite surveys indicating that thousands of CEOs have yet to see meaningful returns on their AI investments. The disparity between these two facts raises questions as to whether AI itself is solely to blame for massive job losses.
Beyond just the tech industry, there was a grand total of 1.17 million layoffs in the U.S. in 2025. In addition to AI, companies also cited restructuring, rising costs, and economic uncertainty. There is a legitimate concern about AI taking human jobs, especially in customer service or support roles, but it’s dangerous to ignore some equally scary reasons as to why companies are dumping employees en masse.
What does AI have to do with massive tech layoffs?
Microsoft led the tech-layoff charge by letting go of no fewer than 15,000 employees in 2025. This came in the wake of an $80 billion investment into AI data centers, leaving little room for doubt as to why the layoffs occurred. IBM laid off 8,000 employees, but their story is a bit different. IBM went on a major hiring spree following those layoffs. In an interview with The Wall Street Journal, IBM CEO Arvind Krishna claimed that total employment had actually gone up. However, this doesn’t change the fact that IBM displaced 8,000 people for AI-related reasons and now specifically seeks to fill specialized roles such as software engineering and marketing — experienced HR generalists may still be out of a job.
Even if a company doesn’t cite AI as the reason behind layoffs, AI itself is still a huge elephant in the room. If the AI bubble pops in the near future, significant economic fallout is likely to occur. Business leaders are surely feeling pressure to keep costs as low as possible in preparation, even if it means leaving valuable employees to fend for themselves.
Why else could tech layoffs be happening?
Amazon laid off 14,000 employees in 2025 in an effort to reverse the consequences of overhiring during the pandemic. Many companies saw the work-from-home revolution as a chance to easily onboard available talent. The ongoing effort to “right-size” the corporate workforce is one alternative reason for tech layoffs. Other possibilities include global trade challenges and the general drive for ever-greater efficiency.
There is no doubt that AI adoption is the cause behind a notable percentage of recent layoffs, especially in the tech space. However, economic research strongly suggests that many, if not most, of 2025’s layoffs were for other reasons. Corporations are eagerly taking the opportunity to sweep these layoffs under the rug by offering the easy excuse of implementing generative AI or automation tools. This frames the move as a step toward technological innovation, and also allows businesses to hide themselves in the crowd of countless other companies making the exact same claim.
