BlockBeats reported on July 25 that data compiled by the Financial Times together with Challenger, Gray and Christmas shows the US technology sector has accounted for more than one-third of all announced layoffs in the country so far in 2026.
Amazon, Oracle, Meta, and Microsoft alone cut nearly 50,000 jobs, equal to about 6% of their total workforce.
Layoffs clash with AI infrastructure spending
That downsizing stands in sharp contrast to spending plans from major tech companies. Amazon, Alphabet, Meta, and Microsoft are expected to invest as much as $725 billion this year in AI infrastructure such as data centers.
The figures point to a period in which workforce reductions and heavy capital expenditure are unfolding at the same time across the sector.
Oracle and Microsoft made fresh cuts
After layoffs in March, Oracle’s workforce was down by 21,000 for the year. This month, S&P lowered Oracle’s credit rating, citing weak cash flow and uncertainty over returns from AI.
Microsoft, for its part, eliminated 4,800 positions this month, mostly in the Xbox gaming division. The report described the move as a broad reset tied to the company’s $75 billion acquisition of Activision Blizzard three years ago.
Academics dispute the AI layoff narrative
Academic researchers are not fully convinced by the claim that AI is driving these layoffs. Enrico Moretti, an economics professor at the University of California, Berkeley, said AI-related job cuts are more often an excuse for management teams to correct overhiring during the pandemic.
"Claiming that AI is improving efficiency is easier than admitting they hired too many people in the first place," he said.
Market pricing points the other way
Market performance has also pushed back against that story. In the 30 trading days after announcing layoffs, companies that attributed the cuts to AI underperformed the Nasdaq by nearly 10%, while companies that cited other reasons lagged by only about 4%.
Amazon and Microsoft have both said clearly that the rollout of AI technology was not the decisive factor behind their layoffs.
AI-native startups are still hiring
While large technology companies have been trimming non-core operations, AI-native startups including Anthropic and OpenAI are still expanding their workforces at a fast pace. The report said employment in AI is growing quickly, while "what is being cut is everything else outside the core business."