US tech companies have cut nearly 140,000 jobs in the first seven months of 2026, according to a July 27 analysis by the Financial Times. The report said those reductions account for more than one-third of all layoffs across the United States during the period. At the same time, hyperscale technology companies have committed about $725 billion to AI data center construction.
Four large tech companies accounted for about 50,000 cuts
The report said Amazon, Oracle, Meta and Microsoft together eliminated about 50,000 positions. Those companies have been cutting jobs while also directing hundreds of billions of dollars into AI infrastructure.
Microsoft said in early July that it would cut about 4,800 jobs, with most of the reductions coming from its Xbox division. According to The Verge, it marked the most significant reorganization in Xbox since Microsoft acquired Bethesda.
Oracle said in June that it had reduced its workforce by 21,000 over the past year. Reuters reported that Oracle explicitly linked the layoffs in an SEC filing to faster AI adoption and the need to adjust its workforce structure.
Restructuring plans are being tied directly to AI spending
Work management software company Monday.com said in a filing with the US Securities and Exchange Commission that it would cut about 20% of its workforce, or more than 600 employees. The company described the move as part of a restructuring plan meant to support ongoing changes in its product, marketing and go-to-market strategy, create a leaner operating model, and invest in an “AI-driven growth strategy.”
GitLab, the version control platform, also cut about 350 employees in June, more than 14% of its total headcount. It also exited 22 country markets to concentrate resources on AI workloads.
Laid-off workers are still being absorbed by the tech sector
The Financial Times said the workforce reduction does not mean the affected employees are leaving tech entirely. AI companies including Anthropic and OpenAI are expanding hiring, and some laid-off workers are moving into roles tied to model training, data labeling and MLOps engineering.
Some companies are also reallocating staff internally instead of removing positions outright. Meta previously cut 8,000 jobs while shifting about 7,000 employees into AI-related roles, leaving net layoffs at roughly 1,000. IBM, while announcing layoffs, also said entry-level positions in AI and hybrid cloud would triple.
The Financial Times called it an “AI replacement loop”
The Financial Times described the pattern as an “AI replacement loop.” In that framework, tech companies reduce payroll costs through layoffs, redirect capital into AI data centers and infrastructure, and use AI tools to raise the productivity of the remaining workforce.
The report said this approach is becoming a recurring model among major tech companies: cut non-core jobs, spend on AI training and inference infrastructure, and reinforce a cycle of “layoffs-investment in AI-layoffs.”