Is AI causing tech worker layoffs? That’s what CEOs suggest, but the reality is complicated

Help wanted sign is displayed at a live music and blues club in Chicago, Thursday, July 24, 2025. Photo by Nam Y. Huh /AP

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If you read the typical 2025 mass layoff notice from a tech industry CEO, you might think that artificial intelligence cost workers their jobs.

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The reality is more complicated, with companies trying to signal to Wall Street that they’re making themselves more efficient as they prepare for broader changes wrought by AI.

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A new report Wednesday from career website Indeed says tech job postings in July were down 36% from their early 2020 levels, with AI one but not the most obvious factor in stalling a rebound.

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ChatGPT’s debut in late 2022 also corresponded with the end of a pandemic-era hiring binge, making it hard to isolate AI’s role in the hiring doldrums that followed.

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“We’re kind of in this period where the tech job market is weak, but other areas of the job market have also cooled at a similar pace,” said Brendon Bernard, an economist at the Indeed Hiring Lab. “Tech job postings have actually evolved pretty similarly to the rest of the economy, including relative to job postings where there really isn’t that much exposure to AI.”

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The template for tech CEO layoff notices in 2025 includes an AI pivot

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That nuance is not always clear from the last six months of tech layoff emails, which often include a nod to AI in addition to expressions of sympathy.

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When he announced mass layoffs earlier this year, Workday CEO Carl Eschenbach invited employees to consider the bigger picture: “Companies everywhere are reimagining how work gets done, and the increasing demand for AI has the potential to drive a new era of growth for Workday.”

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Autodesk CEO Andrew Anagnost explained that a need to shift resources to “accelerate investments” in AI was one of the reasons the company had to cut 1,350, or about 9%, of workers.

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The “Why We’re Doing This” section of CrowdStrike CEO George Kurtz’s announcement of 5% job cuts said the cybersecurity company needed to double down on AI investments to “accelerate execution and efficiency.”

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“AI flattens our hiring curve, and helps us innovate from idea to product faster,” Kurtz wrote.

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It’s not just U.S. companies. In India, tech giant Tata Consultancy Services recently characterized its 12,000 layoffs, or 2% of its workforce, as part of a shift to a “Future-Ready organization” that would be realigning its workforce and “deploying AI at scale for our clients and ourselves.”

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Even the Japanese parent company of Indeed and Glassdoor has cited an AI shift in its notice of 1,300 layoffs at the job search and workplace review sites.

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AI spending, not replacement, is a more common factor

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Microsoft, which is scheduled to release its fourth-quarter earnings Wednesday, has announced layoffs of about 15,000 workers this year even as its profits have soared.

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Microsoft CEO Satya Nadella told employees last week the layoffs were “weighing heavily” on him but also positioned them as an opportunity to reimagine the company’s mission for an AI era.